What do we face in the near future? This is the question we frequently ask ourselves, especially when we are about to close the year. Uncertainty is always a poor companion when making spending and investment decisions.
The most recent economic data point to stability in the slowdown that began three years ago, as opposed to the fear many felt of an impending recession. It is true that qualitative leading indicators are not very encouraging: the instability of financial markets, the flattening and even inversion of the yield curve, and the deterioration of confidence surveys. Uncertainty feeds on itself. Money is fearful, a sentiment that cannot be overcome on its own by an expansionary monetary policy pushed to its limit. And this despite private banks doing what they can to pass on the favorable financial conditions from central banks.
We must improve confidence in the future. But confidence that rests on a solid foundation. This is the true need behind economists’ repeated calls for structural reforms and alternative fiscal demand measures to take over from an exhausted monetary policy. The slowdown, whatever the speed at which it materializes, is a reality we must face. It is no longer only because of those leading indicators affected by extreme monetary measures implemented during the crisis (negative medium- and long-term yields, for example, in Europe), but also because the upswing phase of a long economic cycle is running out from a historical perspective. This should not be viewed pessimistically or with fear. The future is always full of opportunities.
José Luis Martínez Campuzano, spokesperson for the Spanish Banking Association
