Pablo Hernández de Cos: Testimony before the Parliamentary Budget Committee

Testimony by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, before the Parliamentary Budget Committee in relation to the Draft State Budget for 2022, Madrid, 17 October 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and gentlemen,

I appear once more before this Committee for the parliamentary presentation and discussion of the State and Social Security Budget (hereafter, the Budget) for 2023.

In my address I will first review the Spanish economy's performance and macroeconomic outlook in an extraordinarily uncertain international environment characterised by, inter alia, globally high inflation rates and the numerous adverse implications of the unjustified Russian invasion of Ukraine. Second, I will analyse the role that should be played by the various economic policies in such a setting. Third, I will offer my views on the main aspects of the Draft Budget for 2023, as well as the Budgetary Plan for 2023 published on 15 October. For this purpose, I will begin by offering an analysis of the various channels through which the current inflationary episode may affect the public finances. Lastly, I shall conclude with some thoughts on the medium-term fiscal policy challenges facing our country.