The recent update to the IMF’s World Economic Outlook report points to a stabilisation in the pace of global growth, albeit at low levels from a historical perspective. This is no small matter, given that in October a synchronised slowdown was being discussed due to the build-up of global risks, including Brexit and trade tensions. These and other uncertainties have only eased, though without disappearing entirely.
The point is that we have become accustomed to a scenario dominated by underlying uncertainty, with ups and downs, which has been addressed almost exclusively through exceptionally accommodative financial conditions. However, the prolonged use of many of these monetary measures over time risks becoming a new source of uncertainty that reinforces the existing one. The European Central Bank itself refers to vulnerabilities arising from potential excesses in the valuation of certain financial assets and markets, and to how economic agents are managing risks.
Edelman’s latest report focuses precisely on society’s lack of confidence in the future in the face of this everyday uncertainty. It also offers us the answer for restoring trust: do the right thing. But restoring trust on a global scale also requires political cooperation, an appropriate mix of economic policies in which fiscal measures carry greater weight, and a determined fight against inequality, which is already evident in many OECD countries.
Uncertainty stemming from climate change and the risks linked to the transition is also present. It is important for the authorities to take more decisive action to steer this process towards an economy that is more respectful of the planet. Banks are fully committed to facilitating this.
José Luis Martínez, Spokesperson for the Spanish Banking Association
