The president of , Carlos Torres, spoke this Friday about the new bank tax that began its parliamentary process this week, and predicted that it will put a brake on Spain: “The Spanish economy will grow less with this tax what would grow without him”.
In a conference at the Círculo de Economía in Barcelona -the first event under the new presidency of Jaume Guardiola-, he claimed that banking is part of the circulatory system of the economy, and that the Prime Minister himself, Pedro Sánchez, defined it this Thursday at the BBVA sustainability forum as a “neuralgic” actor, so the new tax will lead to “less growth” and will translate into “less employment, less wealth and less taxes”.
“The key to growth is private investment, which requires structural reforms that make investment profitable, and adequate incentives, in a stable regulatory environment,” he argued.
Torres has considered that the current priority must be to stop the inflationary scenario, which is now “the most challenging element and the one that produces the most inequality”, and meanwhile, create from the administrations “temporary direct aid for the most vulnerable, selective and that distort the market as little as possible.
The executive president of BBVA has also been in favor of an income pact because “inflation impoverishes everyone and mechanisms must be sought to avoid entering an inflationary spiral.”
technical recession
For the moment, BBVA maintains its forecast that the Spanish economy will grow by 1.8% in 2023, but given the current uncertainty it is contemplating downward revisions, since short-term projections point to negative growth in Spanish and European GDP in the last quarter of this year and the first of 2023: “What will happen in the second quarter will depend on the energy situation and inflation.”
For now, he sees a moment of “calm before the storm”, with card spending growing almost 30% year-on-year this summer and investments in machinery and capital goods 17% above pre-pandemic data.
At the moment, BBVA does not detect indicators of deterioration in delinquency or provisions, although it recognizes that there are negative signs such as that some industries are stopping because they cannot pay the cost of energy.
Bet on Türkiye
Torres has used the current power of BBVA and its ability to resist the arrival of new crises due to its diversification, business model and capital strength, and has defended its “long-term” commitment to Turkey through its subsidiary Garanti: ” We already had the risks because we had 50% and we were already consolidating, and we saw the opportunity to buy 36% more at a good price.”
“The market has not understood it and has gone too far because Turkey has taken us several times,” he lamented, recalling that it has been an investment of 1,400 million in a country that is now suffering from skyrocketing inflation, but that has “85 millions of people at the gates of Europe, young and educated and who adapt quickly to adverse situations”.
In any case, Torres sees in Turkey “a lot of similarity” with the evolution of the subsidiary in Mexico, which is now a great business lever for the group.
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