AIReF raises its inflation forecast to 6.5% this year, three tenths higher than expected a month ago

The Independent Authority for Fiscal Responsibility (AIReF) estimates inflation this year to be 6.5%, three tenths higher than a month ago, and will drop by 2023.

In the presentation of the report on the 2022-2025 Sustainability Program Update, the Director of the Economic Analysis Division of AIReF, Esther Gordoexplained that no second round effect has been observed so far, which would allow Control inflation starting next year,

“We think the degree of sluggishness in the labor market is high”, and for the time being Salary They recorded “moderate growth,” he reported.

AIREF has already backed a review of the government’s macroeconomic table in April—it has lowered its economic growth forecast for this year to 4.3%, but maintained the deficit reference at 5% of GDP, though It has warned of downside risks. War, Pandemic and Inflation in Ukraine.

AIReF provides that Spain’s economy will grow by 4.3% this yearIt is anticipated as a good performance of employment, savings, normalization of tourism and maintenance of favorable financial conditions, similar to the previous forecast of the government.

“The scenarios proposed in the sustainability program are viable”, underlined AIREF President Cristina Herrero.

However, he cautioned that, according to AIREF calculations, The structural deficit will be 4% of GDP in 2025, a far cry from the target of 0.4% of GDPThat would make it difficult to reduce the public debt, which would rise again as of that year without measures.