The First Vice President of the Government and Minister of Economy, Trade and Business, Carlos Cuerpo, indicated this Monday that, in addition to closely monitoring daily the evolution of energy prices due to the war in Iran, the Executive will monitor with special attention the cost of the shopping basket.
"The danger of this rise in energy costs is that they end up affecting the rest of the shopping basket. We already saw it, for example, in the case of the war in Ukraine, where there are already analyses that indicate that the price increase of the cost for farmers ended up affecting, after 8 or 12 months, food prices. In fact, not completely, but that cost growth is partially transferred," Cuerpo acknowledged in statements to the SER network collected by Europa Press.
For this reason, Cuerpo has explained that the Government has reacted quickly to lower the costs that farmers bear, with the aim of also limiting a possible second-round impact on food. "Anyway, we are also going to be on top of the prices of the shopping basket," he has stated.
In this vein, the first vice president has stressed that, if the situation requires it, the anti-crisis measures already underway will be extended or reinforced, focused mainly on tax cuts on energy.
"We have three months ahead to see the effect both of the evolution of the war and of the impact of these measures. And we will effectively see if it is necessary to expand or not this first package of measures. In the case of the war in Ukraine, in the end we had to implement seven packages of measures successively, since the conflict was prolonging beyond what was initially expected," he recalled.
Thus, Cuerpo has reiterated that the Executive is willing to maintain support for households and the most hit sectors, adapting the response depending on where the impact of the war is concentrating.
For now, the minister has defended that the tax cuts applied to electricity and fuels within the first anti-crisis package are yielding positive results, not only for the affected groups and families, but also in containing inflation.
"In the month of March, the growth (of inflation) has been able to be cushioned thanks to the measures we put in place on the 20th, that is, barely 10 days of implementation of the measures and a certain cushioning is already noticeable. It is true that prices have risen from that 2.3% to 3.3% due to the impact of the war. But if we discount the effect of energy or fuel prices, inflation remains more or less stable in the month of March compared to what it was in February," he explained.
Uncertainty about inflation due to the war
Regarding the inflation forecasts managed by the Government in the current context, Cuerpo has highlighted the "impossibility" of having a precise projection now due to the "enormous uncertainty" linked to the duration of the war conflict.
The holder of Economy has pointed out that the central scenario of the Bank of Spain for this exercise points to an inflation above 3%.
"I believe we are all around similar estimates. In fact, many analysts even foresaw greater inflation already in March, and thanks to the measures we have been able to contain it. We will see what happens in April and, among other things, it will depend on how the price of crude oil evolves, which is one of the biggest uncertainties we have and which also moves with enormous volatility from one day to another, even responding to news or tweets," he affirmed.