The governor of the Bank of Spain, José Luis Escrivá, has pointed out that indirect effects on inflation derived from the increase in energy prices are already beginning to be observed, although he has specified that second-round impacts are not yet manifesting.
"We are already starting to see indirect effects, not only in energy components but in other components," Escrivá has stated during his speech at the "XVII Financial Meeting," organized by KPMG and "Expansión." However, he indicated that the Bank of Spain is not seeing second-round effects on wages. How all this develops is what will be monitored in the coming months, he noted.
The head of the supervisory body has refused to specify what level of interest rates could be considered restrictive for economic activity, understanding that this would imply offering future guidance on monetary policy, something that the European Central Bank (ECB) intends to avoid. "At certain thresholds, it is difficult to judge whether the policy is restrictive or accommodative," he said.
In any case, Escrivá has urged to pay attention to the evolution of the market interest rate curve, which, in his view, is under upward pressure due to the combination of fiscal imbalances with high levels of debt, the rise in risk premiums, and intense demand for financing for projects linked to technologies associated with AI.
This Tuesday, the leading inflation indicator was published, which stood at 4.9% in September. When questioned about this, Escrivá explained that there is a component linked to energy and to how its increase passes from the wholesale market to the final consumer. He also emphasized the growing differential between Spanish core inflation and that of the eurozone as a whole, which already exceeds one percentage point.
In relation to this gap in core inflation, the governor specified that it is concentrated in certain segments of the services sector, largely driven by strong external demand linked to tourism. Between January and July, the latest available data, Spain received 58.1 million international tourists, 4.6% more, with spending exceeding 82 billion (+7.8%).
Mortgages and housing accessibility
Asked about the option of setting limits on mortgage granting, a macroprudential tool whose design is being finalized by the Bank of Spain, the governor recalled that financial entities maintain a "reasonably prudent" behavior. In addition, he warned that a general restriction could have unintended consequences for young people and households with lower incomes. "This would have social and redistributive effects that we have to consider," he said.
"For a measure of this type (...) we would have to be very precise," he stated. "We would have to parameterize a lot to avoid that measures that would be justified from an aggregate point of view would not have, on the other hand, undesirable effects," he clarified.
Regarding the residential market, Escrivá recalled the "particularly acute" situation of Spain compared to other European countries in terms of housing accessibility. In this context, he defended that any public policy strategy must be designed with the coordinated participation of all administrations.
In any case, he insisted that Spain faces a "serious supply problem," beyond access difficulties. According to estimates from the Bank of Spain, in recent years a deficit of 750,000 homes has accumulated, which could expand to 1,000,000 by 2028.
Moreover, he warned that, even if licenses, procedures are accelerated, and technical and human resources of the administrations are strengthened, the construction sector currently does not have "the sufficient strength" to significantly increase the promotion of new housing.
Finally, he urged policymakers that, while addressing how to alleviate the lack of accessibility and prevent situations of vulnerability, "they must internalize that they do not generate disincentives to supply."