BarcelonaThe job of chief economist in a financial institution is demanding, and more so in times of turbulence, and that is why it is difficult to find a hole in the schedule of Sofía Rodríguez, who attended the ARA on Friday. This economist, born in Madrid in 1972 and who has worked at Banco Sabadell since 2000, looks at the current situation with a point of optimism that clashes with the catastrophic speeches that have been heard in recent days.
How worrying is the current situation?
— The situation is indeed challenging: inflation takes away purchasing power from families and rising interest rates increase debt payments. But the economy continues to present strengths, such as the labor market. The situation is one of uncertainty, but we are in a much better place from the point of view of the balance sheets of households and companies, and then there are the government measures that can be taken to cushion the situation.
The job market is a big factor for optimism. Can we continue to trust it?
— It is not clear that there are signs of weakness in the labor market. And I don’t think we’re resting the positive view of the economy on that alone; we also have the European recovery funds, the balance of families or the recovery of the tourism sector.
I’m sure you’ve heard doomsday comments about what’s coming this fall in recent weeks. Are we worrying too much?
— There is no evidence that this is affecting the Spanish economy. In most cases, the indicators of the Spanish economy are above the levels that existed at the time of the invasion [d’Ucraïna], and in many, better than before covid. The global environment is complex, indeed, and brings not concern but uncertainty about major trading partners, who will surely experience something close to a recession in the coming months.
Do you think it makes sense to compare this crisis with that of 2008?
— They are completely different situations. The crisis of 2008 had to do with excessive indebtedness in the private sector. Now you have many supply problems, disruptions that have to do with the energy crisis and Ukraine but also with climate issues, deglobalization. And in terms of your ability to respond, it’s also very different. There have been very unique advances in the construction of European institutions. And in terms of room for manoeuvre, in 2008 there was the positioning of austerity and now we are in the logic of suspending fiscal rules and stimulus programs. Nor are the starting imbalances the same. This is not to belittle the nature of this energy crisis, but the starting position, the institutional strength, the measures you can resort to and the health of the banking system are different.
Do we still have the covid mattress?
— From the point of view of the balance sheet, families and companies are at relatively comfortable levels. The situation is good compared to Europe, to history and to the crisis of 2008. This mattress, to which we can add the ICO credits, is there, and it remains to be seen how far we have traveled during the summer.
Should we worry about the end of the moratorium on contests? Are there too many companies that could go under?
— The delinquency of the private sector has been decreasing. It has fallen a lot, since December 2013 [quan va rondar el 14%] and now 4.1% is expected by the end of the year. It may not continue to decrease, but no increase is expected.
What will happen in Germany?
— If the measures to slow down the price of energy are on track, what they will have would be a slight contraction in the next two quarters but not necessarily a drop. It appears that they will be close to a situation of stagnation or recession. But the strategy of Germany and Italy to replace Russian gas is being successful; now we have to see if they can reduce their consumption, it will depend on how mild the winter is.
We are not used to looking good in crisis photos. Do we have any merit that should be highlighted, beyond the geographical factor?
— In terms of geography, indeed in this case we are on the other side of the exhibition, but I would not take credit for the enormous adjustment in the Spanish economy since the crisis of 2008. And the credit belongs to everyone economic agents, it is not just geographical chance, but a result of the fact that crises come out strong.
When will the rates go down?
– Yesterday [per dijous] Lagarde was far from a rate-lowering speech. The ECB is showing a very orthodox attitude against inflation, which is good because it is its main mandate and from the point of view of citizens’ welfare. What emerged from the ECB meeting is that the economic slowdown need not lead to a halt in the rate hike cycle if inflation is not under control. The good news is that we can expect inflation to moderate over the coming year. We cannot say when there will be downgrades because we are still in the upswing phase.
Will minimum inflation return?
— It is difficult to think that we will return to the pre-covid inflation paradigm, which had risks such as deflation and negative interest rates. The conditions of productive supply are more unstable, there has been a paradigm shift, which does not mean that we have inflation of 10% or 5%.
Does the European Commission have room to deal with this new crisis?
— Crisis after crisis, and despite the suffering, the European institutions have emerged strengthened. Everything to do with the Next Generation funds is a signal in this regard. Fiscal responsiveness exists and is being implemented.
Will the austerity recipe ever return?
— The fact that tax rules have been lifted does not mean that they do not exist. The covid situation is not what it is now and at some point the fiscal rules will have to be restored, which are there for the benefit of everyone.