The President of the Government confirms that Spain will worsen its economic growth forecasts

The war is having an impact on the world economy that Spain will not be spared. This has been recognized by President Pedro Sánchez, who confirmed that “there will be a downward revision of GDP in Spain, as in Europe and in the world.” Of course, Sánchez pointed out that Spain will continue to grow “at a good pace”, but below the forecasts sent to Brussels, which estimated a GDP growth of 7% this year and 3.5% next year. Therefore, the objective of ending the year having already recovered the economic levels prior to the pandemic is moving away.

One of the direct consequences of the war in the pockets of the Spanish is the high inflation, which ended the month of March at 9.8%, the highest rate in four decades. In the Antena 3 interview, the president blamed this great rise on the war and energy: “70% of the rise in prices is explained by energy and unprocessed food,” argued Sánchez, who also indicated that in the United States United States or Germany are also registering inflation rates “above 8%”. For this reason, he proposes working in three areas: reforming the energy market at a European level, a fiscal plan and continuing with the green energy transition roadmap.

«All the countries of the European Union are suffering from the same problem, we have to redefine how electricity prices are made. In 2021, 46% of our energy mix came from renewable energies and between 10-12% gas. That last percentage cannot be explaining 100% of the evolution of the price of electricity”, explained Sñanchez.

Revaluation of pensions

And despite the large rise in the CPI, the President of the Government was firm in the decision to revalue pensions next year based on the new formula recently approved in the reform and which is based on average inflation for the year, although this could rise to 7.5%, according to the estimate made by the Bank of Spain. “It is not a political issue but it is written in the law,” explained Sánchez, who reiterated, as Minister José Luis Escrivá had done on previous occasions, that pensions are guaranteed their revaluation in accordance with the reform made by the Government of Spain and the law.

However, he did seem to rule out that the salary of civil servants will rise in 2023 based on this expected inflation of 7.5% and linked this rise to the income agreement that unions and employers are negotiating, although for the moment with few signs of reaching an agreement, since the CEOE rejected the last proposal of the unions and is reluctant to include the salary guarantee clauses that they demand.

In any case, the head of the Executive trusted that this “agreement can come to fruition soon” and that it also includes not only the evolution of salaries, but also decisions on dividends and the distribution of profits.

lower taxes

In addition, he responded to the fiscal plan proposed by the Popular Party arguing that “lowering taxes is not a country project.” “The PP always proposes lowering taxes, but then never applies it,” said Sánchez. In his opinion, the PP has “three problems that it has not yet resolved: corruption, the extreme right and thirdly, lowering taxes is not a country project”, he pointed out.