Just a few hours after the Vice President of the Government, Nadia Calviño, argued that inflation is “transitory”, the father of this word, Fed Chairman Jerome Powell, was responsible for burying it.
While Calviño repeatedly insisted on calling the rise in prices a “transitory phenomenon,” Powell acknowledged that the rise in inflation, which until now had been closely linked to the pandemic, is spreading more widely.
“The risk of higher inflation has increased,” said the Fed chairman, who until this last appearance had been reluctant to rule out transitory status.
A longer peak in inflation
As if that were not enough, the OECD, In updating its economic forecasts, it indicated that the main risk for the economies is that the current peak of inflation is longer and increases more than expected. Calviño, on the other hand, is moving in the opposite direction, in that in a few months it is controlled.
The OECD also gave a new blow to the growth of the Spanish economy. It revised down its forecasts for this year to 4.5 percent.
It should be remembered that this same body had forecast 6.8 percent in September, even above the Government’s estimate, which remains at 6.5 percent despite the fact that no institution already manages that percentage.
Spain, the engine of growth?
And while Calviño announced that Spain will be one of the growth engines in 2022, the OECD also lowered the Spanish forecasts for that year. At the moment it places it at 5.5 percent, which implies a drop of 1.1 percentage points in relation to its September calculation.
The return of the Spanish economy to prepandemic levels also delays a quarter. You have to wait until the first quarter of 2023.
The OECD has also sent several messages to the Government about the reforms it has underway. Especially that of pensions. He doubts that the increase in prices announced by Minister Escrivá is sufficient to guarantee the sustainability of pensions.
When the facts prevail
The President of the Government, Pedro Sánchez, instructed his ministers to send only positive messages, to insist that the recovery was strong and that Spain was leaving the nightmare of the pandemic behind.
But one thing is good intentions and the desire to maintain optimal electoral expectations, and another is the facts.
It does not make sense to remain installed in a parallel reality, when the data indicates the opposite. Is there no one in the Government who questions what is happening? Why has Spain, from leading the recovery in the euro zone, gone in a matter of months to the tail, to being the country with the worst growth prospects?
It is absurd to try to buy time when all the cards are already on the table. And Sánchez’s bluff, with the collaboration of Calviño, has been exposed.