Wednesday, September 28

Foment confirms that omicron and industrial problems will slow down the recovery

The Catalan economy is recovering, but at a slower pace than months ago and with less force than expected. The reasons behind the braking are not new: another unexpected wave of covid, a drastic breakdown of ‘stock’ in the industry and a significant increase in prices. “The forecasts made by all international organizations are in line with consolidating the recovery of the levels that we had before the crisis, either this year or next,” they assure from Work Promotion, which in turn recognizes that in the coming months there will be some resentment of the activity.

The employers of the large Catalan company presented its economic situation report, in which he concludes that the recovery is indeed slowing down, but that in no case are there worrying signs of a significant decline in the economy.

“We have moments of a certain storm, but everything indicates that it will be a temporary storm and that we will be able to advance with this recovery process everywhere,” said the deputy secretary general and director of the economy of the institution. Salvador Guillermo. This spokesperson explained that the new wave of pandemic, combined with the problems derived from the lack of supplies, the high cost of energy and the “very significant” increase in prices in general (but especially in industry) “has made that everywhere the forecasts tend to be corrected downwards, but always with positive and still significant values ​​”, he insisted.

Specifically, Guillermo recalled that during the spring entities such as the International Monetary Fund (IMF), the European Comission and the OECD predicted economic growth for Spain in 2021 of 6.4%, 5.9% and 5.6% respectively. Near the end of the year, these forecasts have fallen by around one point in all three cases, going to 5.7%, 4.6% and 4.5%, again respectively.

Tough monetary policy

Despite this, Foment has placed a general emphasis on Wednesday that these data are still positive, although they do detect a certain danger in the short term in which a rise in wages is negotiated in accordance with the IPC, the Consumer Price Index.

“The whole process of collective bargaining must be done with great moderation, great prudence and not looking at current values, but at values ​​relative to the medium term,” Guillermo has warned. According to the Deputy Secretary General of Foment, a significant increase in salaries could consolidate inflation levels in the medium term (the higher the consumption capacity, the higher the prices) and that, in turn, would end in a tougher monetary policy than it would slow down growth.

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In his opinion, current inflation (5.5% in November compared to last year, the highest level in almost three decades) is a temporary effect of the problems of lack of supplies that the industry is experiencing, but the situation it will normalize in a matter of months.

In fact, the recipe of this employer representative to improve the level of well-being of the country is to improve its productivity ratios, a problem that Spain has dragged on since before the pandemic and that is “essential” to solve, he concluded, to guarantee economic growth .

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