Wednesday, September 28

Inflation has risen above expectations due to factors linked to the pandemic

With what macroeconomic scenario do you work for 2022?

We believe that it will be a year in which the recovery will continue to settle. It is true that we have finished 2021 worse than we expected with the omicron issue, which has stopped the activity in these last weeks of the year, but it is showing that mortality is lower, it is true that it is very contagious but we are not seeing a collapse of the health system and that will allow to continue maintaining. The economies will gradually reopen and that will make the economy pick up momentum again throughout the year 2022.

It is true that not all countries are the same, we believe that growth in the US has already reached its maximum and during next year we will have a somewhat lower growth, but Europe will probably grow more because we will have all that consumer savings bag that is has remained and that we want to spend and we will also have the arrival of European funds that will make public and private investment ever higher, which will allow us to see Europe grow more than the United States for a long time. comes.

Are you worried about inflation?

Inflation is a phenomenon that we continue to think is temporary. It is true that inflation was expected to rise, but it has done so above what was expected, probably due to factors linked to the pandemic, if 2020 was exceptional because we had very low inflation because we were locked in, in 2021 it What has happened is that they have reopened the doors and the demand has been very strong, there has been a lot of demand, especially for goods, since services not so much because tourism has not recovered.

This great demand for goods means that the supply has not been able to adapt to the demand and what has happened is not only that the factories have been closed but also that no investments have been made in productive capacity and when the demand bursts there is no supply To meet that demand, which has caused these bottlenecks, which are mainly suffering in Europe, and as 2022 progresses we will see how little by little the problem will be solved.

How does the main German bank see the Spanish economy?

We believe that we are in a recovery phase and in 2022 we will have a growth close to 6% and it is even possible that we will exceed it, it depends on the use of European Funds in public and private investment.

In Spain we have a savings rate that is below 10%, but it is a fairly high number and, therefore, we believe that consumption will continue to pull the economy.

Which assets are you overweight and which are underweight right now?

We have a situation very similar to what we had before the pandemic, the financial repression. Real rates are very low and with this inflation even more, therefore, although central bank interest rates will start to rise, in the US they will start in 2022 and in Europe probably not until 2023, but still Inflation is very high, which means that real profitability is negative and this means that beating inflation and achieving positive profitability is difficult. We continue to think that the stock market has value, we still like the American and European stock markets, in fact, we like developed markets more than emerging markets, we believe that China will continue to generate volatility during the first part of the year, but probably from In the middle of the year, all these structural reforms are going to have an effect on the Chinese economy and this will allow us to see growth or a situation in the emerging markets with positive profitability in the second half of the year, but for the moment we are positive in the developed market.

In Fixed Income there is very little value, you have to have public fixed income in the portfolio because it serves as a refuge, but the profitability is negative. In high quality Corporate Fixed Income, profitability is also very low, which means that we would go mainly to emerging fixed income and high risk fixed income.

What Spanish stocks do you see the greatest potential for?

Those that are linked to everything that has to do with European funds, which are very directed towards everything that has to do with digitization, green energy, sustainability … all these sectors can be favored.

On the other hand, we believe that it will be a year in which, with the recovery, cyclical stocks will do well, in fact, we in the portfolios are recommending a mixed strategy, on the one hand, having technology stocks because it is true that They have risen a lot and are the future since all European and American programs go out there, that is, digitization is something that is here to stay, but then we also believe that this year the cycle has already recovered somewhat and as the The European economy grows more and we will see how consumption and all the bottlenecks in the auto sector recover, this should favor cyclical sectors.

And the tourism sector?

Tourism had an attempt to recover in summer, but what has happened to us now with omicron has been very damaged. It is clear that more and more new variants of Covid are going to come out, but it is also clear that vaccines work since we are seeing how the severity of omicron cases is generally concentrated in people who have previous pathologies or who are not vaccinated. New variants will come out but little by little we will know how to live with the virus, how to treat it and that will cause economies to open and tourism to recover. I think that during 2022, in the tourist season, it will recover more and more.

He talks about the importance of European funds and one of the main investment focuses is going to be the ecological transition. How do you see this trend and ESG funds?

We have long had what we call the long-term themes, the famous megatrends, and sustainability is not that it is a trend but that it is a fact. Europe wants to become the great supporter of everything that has to do with climate change and sustainability, we have achieved that China is now also quite aware of the issue of ESG values, sustainability, climate change, etc. And in the United States too, it is something that is here to stay.

What is going to happen is that funds that are not sustainable, that do not have an ESG filter, little by little will lose attractiveness and more and more, the law requires that from next year a test be carried out on investors to ask them if they want to include sustainable criteria, therefore, it is something that is here to stay.

Within all this there is something that we like a lot, the blue economy, which is the power of the oceans, which is very little exploited and is an issue that will be more and more in the mind, especially with public-private collaborations because the oceans are the eighth largest economy in the world in terms of wealth and yet it has not been sufficiently exploited.

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