The Bank of Spain revised upwards its average food inflation forecast for 2023 to 12.2%

MADRID, 23 Mar. (EUROPA PRESS) -

The First Vice President and Minister of Economic Affairs and Digital Transformation, Nadia Calviño, is committed to "following very closely" the evolution of business margins after insisting that at this time "everyone" must contribute to moderating the evolution of prices of food.

"We must closely monitor the evolution of margins, because at this time we all have to contribute to moderating the evolution of food prices", pointed out the first vice president during her participation in the '2023 business forum, the decisive moment of the Next Generation', organized by 'El Economista'.

All this after the Bank of Spain has revised upwards its average inflation forecast for food for 2023, from the 7.8% forecast last December to the 12.2% estimated now. According to the agency, the recent increase in food prices reflects the gradual transfer to prices of the cost increases that producers have experienced in recent quarters. "The price of food has not peaked," warned the Bank of Spain in its latest forecast report.

Calviño has indicated that the main challenge continues to be inflation, although everything indicates that it will drop in this month of March. Despite this, the vice president has warned that the data that is being recorded during this first part of 2023 is part of a context of "enormous volatility", since the rates are being compared with those registered in the turbulent moments in which war broke out in Ukraine in 2022.

"The measures that we have been implementing are proving to be effective and have a long way to go, but we cannot be satisfied", stressed the minister.

The first vice-president stated that the Spanish economy shows "relative strength and resilience", even in an international context as complex and turbulent as the one experienced due to the war in Ukraine, the rise in interest rates, the escalation of prices and, more recently , due to the volatility of international financial markets.

"Financial volatility and the need to guarantee financial stability is one of the absolute priorities and one of the most important issues at this time," stressed the first vice president.

But even in this context of uncertainty and volatility, Calviño has pointed out that Spain has registered very strong growth of 5.5% in 2022, similar to that of 2021, and has emphasized that all national and international organizations are revising upwards its forecasts for this year 2023, placing Spain as the country that will grow the most among the main economies in the area.

In fact, the head of Economic Affairs has highlighted the forecasts published yesterday by the Bank of Spain, with an upward revision of GDP in 2023 from 1.3% to 1.6% and a cut in average inflation forecast this year from 4.9% to 3.7%.

Among the factors that have contributed to this evolution of the economy, "very different" from the end of the 2008 financial crisis, Calviño highlighted the behavior of the labor market, the evolution of the balance of payments and the reduction of the deficit and public debt -which in 2022 is below the Government's objectives-, despite the fiscal effort used to deal with the consequences of the pandemic and the war in Ukraine.

In addition, the person in charge of the economic area of ​​the Executive has highlighted the fact that last year Spain received record investments of 860 investment projects for more than 44,000 million euros that are creating more than 96,000 jobs.

According to the head of Economic Affairs, the deployment of these funds is accelerating notably in the first quarter of 2023, with more than 10,757 million euros already authorized. This volume of authorized funds is equivalent to almost 40% of the 28,692 million budgeted for the entire financial year 2023.

In total, calls for aid and tenders linked to the European funds 'Next Generation EU' have been resolved for more than 23,500 million euros, which finance almost 300,000 projects throughout the territory.

In addition to the investments, Calviño has assured that the Government will continue to implement the structural reform agenda in 2023 with new key reforms such as the university system, already approved, the second phase of the pension reform, agreed with the unions and approved today in Extraordinary Council of Ministers, or the new Housing Law.

The minister has informed that more than 21,600 million euros have already been allocated to the regional governments so that they manage investments in the field of their competences, such as: education, health, sustainable mobility or housing.

Calviño hopes that before the end of this month the European Commission will make the payment of 6,000 million euros of the third payment of European funds, after receiving the positive assessment from Brussels on the fulfillment of objectives and milestones. With this, the fulfillment of 121 milestones and objectives will have been validated since the plan was launched in July 2021 and the funds disbursed to Spain will amount to 37,000 million.

In addition, the first vice president has informed that the Government is already working on the request for the fourth payment, which will amount to 10,000 million euros, upon completion of the agreement with the unions for the pension reform, which was one of the most important milestones, and it has advanced that the Executive is also finalizing the preparation of the Addendum to the Recovery Plan to reinforce strategic autonomy and modernize the country.

To this end, the Government has spent months maintaining a dialogue with the regional governments, parliamentary groups and social agents for the execution of investments and reforms and the preparation of the Addendum, which will launch the second phase of the Recovery Plan, with which will mobilize 94,300 million euros of European funds between additional transfers from the Plan and the 'Repower EU' and credits