Spanish finance minister expects Spain to hit 2% inflation in 2025

We are actually one of the growth engines in in the Eurozone at the moment, not only with fantastic 2023 figures where we actually grew 5 times above the Eurozone average, but also 24 looks promising ahead. And when you look at the outlook, for example from the IMF that was just released yesterday, what we see is that Spain will continue to be one of the major growing advanced economies. So actually the main challenge will be to keep up the space in the medium term, so to really face the challenges that we have in terms of productivity of competitiveness going forward. Spanish inflation has faded from double digits to 3.2% year over year in March. And those who say rivals like Italy and 1.8%, how careful does ECB need to be about monetary policy here so that you’re not left with entrenched inflation in Spain? Well, what we are seeing, as you said is a gradual moderation of inflation going forward. The Bank of Spain expects us to be back to 2% already in 2025. So this is a continuing process. And what we expect from analysts and also from the speech of the ECB president is that most likely if these data keeps on actually showing the signs of gradual moderation, we might enter into a new phase of the interest rate cycle in the second semester. Here are the IMF spring meetings. Fiscal consolidation is also front and center. Now. The IMF says debt in Spain remains high at 107% of GDP. Windfall taxes are doing their bit to reduce some of the debt to energy support as well-being unwound, but additional measures are required. That’s been the message. How important is it to enact further fiscal consolidation? Well, fiscal responsibility is one of the main drivers of our economic policy for the past few years actually. When you look at what has happened in terms of the debt to GDP ratio over the past four years since the peak as a response to the pandemic, that to GDP has come down by 20 percentage points or will have come down at the end of 2024 by 20 percentage points. So this is a clear message of fiscal responsibility. From the Spanish side, we are in terms of deficits to GDP, we’re almost back to 2019 figures close to 3% and we expect to reach these magic figure of 3% by the end of 2024. So we will continue this deleverage in this consolidation process going forward, but to make it compatible with growth and and investment also in the medium term. I want to talk about growth and investment because Mario Draghi has made some comments calling for a radical change in Europe to remain competitive, saying the US, China no longer playing by the rules of international trade. Do you feel that when it comes to to Spanish growth and investment, do you feel that it’s more difficult to grow now because you’ve got major competitors like the US and China not doing what they did in the past in terms of sticking to rules based system? Well, everyone is actually trying to redefine their role in these new enhanced competition system that we have with these new geopolitical blocks that are forming ahead. So from the Spanish and from the EU situation perspective, what we are doing is trying to really keep up in this competitiveness race. And actually, when you look at the Spanish position, particularly investment, foreign direct investment, for the past five years, we’ve been amongst the top 4 worldwide when you look at the Financial Times data in terms of new Greenfield projects. And I think this is a clear message of confidence in the Spanish economy and its outlook. I wanted to ask you about Spain’s ages when it comes to technology because I attend all of your events, Nobel, World Congress, and year after year, there’s a ton of technology. But I cannot think of 1 Spanish AI player, for instance. I mean, France has one now in the race, Mr. All AI, but where’s Spain’s rival in that space? And are you missing out on the tech acceleration we’re seeing through AI? Well, that’s one of the main elements going forward where we are putting a lot of effort and a lot of investment now not only trying to build our own a model and language also related to the Spanish language and the whole setup of information that can be actually adhered to the to the to the Spanish model. But what we’re doing is also trying to develop new applications, new technologies that would help us in this productivity and competitiveness race. For example, we are trying to build up a new artificial manager for SM ES that will help them actually navigate through all the administrative barriers and and and the red tape that we have in in Europe to actually leverage on the productivity. I want to come to Telefonica because the government acquired a 3% blocking stake in the telecommunications company in March after telegraphing that this move would happen late last year after the Saudis through STC took a stake in in the company. What sort of message does this send at a time when there’s also another report throughout this week from Eureka that’s calling for more consolidation in telecommunications. So what’s the message you sending to the Saudis and other would be investors about this? I would say there are two different messages here. One is that Europe in general, because it’s not only a Spanish case, other European countries are taking or having stakes in their big telecom companies. So Europe is not naive in this competitiveness race going forward. We are protecting our strategic interests. That’s one a particular important message. Of course we are open to foreign investment, but we protect our strategic interests. And then the second message is that we need to leverage on scale. Europe internal market is one of our main assets and we have to build up these scale elements that our own companies can make take advantage in profit of these 400 million internal market.