The Eurogroup expects inflation to slow down the current trend in 2022

  • The ministers of Economy and Finance of the euro zone insist that it is a transitory phenomenon

  • Vice President Calviño does not rule out a possible downward revision of growth forecasts in Spain

The success of the vaccination campaign against covid19 and the political response of the governments of the Eurozone have made it possible to underpin the Economic recovery with growth that has rebounded strongly in the last two quarters. Even so, the situation is complex due to bottlenecks in the supply chain and an increase in inflation that, although due to temporary and transitory factors, “is being more persistent than we had anticipated & rdquor ;, admitted the President of the Eurogroup, Paschal Donohue, who expects inflation – which stood at 4.1% in October – to lessen the current trend and reduce throughout the next year.

“There is consensus that the inflationary challenges that we are facing right now will improve next year, especially thanks to the improvement in supply chains and the evolution in the employment market,” explained Donohoe after the debate held this Monday for the ministers of economy and finance of the Eurozone. A diagnosis shared by the commissioner for economic affairs, Paolo Gentiloni, which explained that the rise in prices is “temporary & rdquor; but that as policy makers “we must remain vigilant and ready to adapt our response as events unfold & rdquor ;.

Economic forecasts

The meeting allowed the ministers of the Eurogroup to hold the first debate on the revision of fiscal rules, a reform that generates tensions between North and South. “Today we have started and it has been a good start but there is still a lot of work to be done so that a consensus can be established on the proposals that we are going to present in the first half of next year & rdquor ;, Gentiloni explained that this Thursday he will detail his economic diagnosis in the presentation of the autumn economic forecasts. Following this, the vice president Nadia Calvin has not ruled out a downward revision of the figures for Spain, although it has insisted that, even in a less favorable macroeconomic scenario, Spain will be “in line to meet the objectives of reducing the deficit and debt already from 2021 & rdquor ;.

As he explained, the government has prepared budgets on a prudent basis and is closely monitoring all economic indicators. “The most relevant indicator in this regard is that of the labor market, which is having a very positive evolution and confirms that the economic recovery is underway, that it is very intense and that it goes from less to more in the course of the year. will accentuate, will intensify that economic recovery in 2022 & rdquor ;, he said. Calviño has also confirmed that “these days & rdquor; will sign the operating agreement with the European Commission, which will allow Spain to formally request the first payment of the 10,000 million euros of the recovery plan.

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European funds

“We are finishing the formal procedures to be able to make that request. I believe that Spain will in fact be the first country to request the corresponding payment thanks to the fact that we have already met the milestones and objectives required for this first six-monthly payment & rdquor ;, explained Calviño who has taken advantage of his trip to Brussels to meet with the vice president and responsible for the competence of the Community Executive Margrethe Vestager. On the table, the process of authorization of public aid to the Strategic Project for the Recovery and Economic Transition (PERTE) of the electric car. According to Calviño, the project “is well on track” and the launch of the main elements of the Strategic Part could take place “before the end of the year, as we had foreseen & rdquor ;.

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