CECA Flags Inflation and Public Debt as Spanish Economy's Top Risks

Antonio Romero, General Director of CECA, identified inflation and high public debt as the main economic risk areas in the current context. Speaking at the 'XVII Financial Meeting' organized by KPMG and Expansión, he attributed the upward pressure on prices globally to the geopolitical situation in the Hormuz area.

According to Romero, this scenario has led the European Central Bank (ECB) to raise interest rates, which poses a classic dilemma for central banks: controlling inflation without hindering European growth. 'The situation in Hormuz is putting pressure on prices at a global level (...) The ECB has reacted by raising interest rates, obviously facing that dilemma typical of central banks,' Romero explained.

CECA emphasized that forecasts prepared by Funcas suggest interest rates could remain unchanged in the coming months due to underlying inflation being 'under control' and wages not yet reflecting second-round effects. However, Romero warned about the pressure on sovereign debt yields as investors demand higher returns to finance states.