In this regard, it should be emphasized that our projections on inflation, which currently anticipate that it will remain high in the coming months, but will moderate gradually thereafter to levels compatible with the ECB’s mediumterm inflation target of 2% is based on the assumption that there will be a slowdown in the growth of energy prices, in line with those on the futures markets, and that a moderate wage growth response and a squeezing of trade margins will prevent the emergence of the pricewage feedback loop. Avoiding this feedback loop from wages, mark ups and prices is precisely the main priority objective of the incomes agreement that we have been advocating in recent months at the Banco de España. It would consist of an agreement between firms and workers, under the framework of social dialogue, to share the inevitable loss of national income that higher commodity import prices entail. And agreement that should also, in our view, include the public sector, by avoiding both an across-the-board fiscal impulse in this context and a widespread use of automatic indexation clauses in expenditure items. The third session of this conference addresses this question. Over a longer horizon, the Spanish economy faces a series of structural challenges, some of them going back several years or even decades. In our conference we will be focusing on four of these challenges, namely the need to correct dysfunctions in the labour market, to boost productivity growth, to make public finances more sustainable and to address the challenges posed by climate change.

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