on russia, but clearly this is not something that can be achieved in the short term. the surge in inflationary pressures apparent in the march data partly reflects the increase in commodity prices associated with the war, but also the delayed effects of the acceleration in intermediate costs in the preceding months on the prices of other goods and services, and the scarcity of certain products as a result of the road hauliers ’ strike. the impact of the increase in energy costs is highly uneven across groups of agents. in the case of households, those with low incomes are most affected. in the case of productive sectors, the impact is naturally greater on the more energy - intensive ones. a second channel, that is also very significant, is the impact of the war on household and business confidence, given the extraordinary uncertainty surrounding the duration and course of the war. this, in turn, introduces uncertainty over the behaviour of the incomes of these agents, which means they tend to postpone their consumption and investment decisions. the sharp decline in the consumer confidence indicator in march ( the largest decrease in the historic time series, which goes back to july 1986 ) gives an indication of the magnitude of these effects. this fall suggests that the increase in uncertainty may have begun to adversely affect household spending decisions. the results of the latest edition of the banco de espana business activity survey ( ebae ) suggest that the war has begun to worsen the expectations of non - financial corporations regarding their turnover and also the duration of the global supply chain problems, which is now estimated to be longer. third, the invasion of ukraine will affect the spanish economy through the trade channel, the direct impact of which is assumed to be moderate, as bilateral trade flows with the countries at war are relatively limited. in 2019, the last year before the pandemic, spanish goods exports to russia and ukraine represented only 1. 6 % and 0. 3 % of the total, respectively. russian tourism, meanwhile, accounted for 2. 2 % of total spending by foreign tourists. however, the indirect effects on spanish trade flows may be significant. the war will particularly affect central and eastern european countries, which are more exposed to ukraine and russia, and, therefore, the growth of spanish export markets. further, the invasion is having a negative impact on the global supply chains for certain productive processes, with signs of a worsening of bottlenecks, after the partial improvement in the fourth quarter of 2021, although the lockdowns in china to check the

2022 to developments in inflation are admittedly in the minority. nonetheless, the figure ( 30 % ) is notably higher than it was at the end of 2021, when it stood at 17 %. of even more concern is the fact that this figure rises to 50 % of the total when considering the agreements entering into force in 2023, albeit still referring to a small number of agreements in this case. fourth, any incomes agreement should provide for multi - year wage increase and job protection - related undertakings. this would offer households and businesses some certainty in their spending and investment decisions. any agreements concerning wage increases should take their lead from the underlying inflation. these recommendations apply to both wage increases and, where applicable, to potential wage guarantee clauses. arrangements such as these have already been used by the social partners in the past and have proven a useful tool for protecting jobs, making firms more competitive and spurring economic growth. 10 fifth, these guidelines on wage developments should be accompanied by explicit commitments to moderate profit margins. only then will such wage restraint actually make firms more competitive, while, in turn, limiting the extent to which rising energy input costs are passed through to other goods and services in the economy. and some sort of mechanism would have to be set in place to ensure this restraint in profit margins can be verified. the simulations performed using the quarterly macroeconometric model of the banco de espana ( mtbe ) underscore the benefits of a successful incomes policy. the mtbe the weight of energy inputs in production and exposure to international competition vary considerably across sectors and firms. to varying degrees, these types of clauses mean that, regardless of the type of underlying shock, any potential future price rises automatically pass through to wage increases, thereby triggering the second - round effects we hope to avoid. for instance, the 2nd 2012 - 2014 employment and collective bargaining agreement, signed at the start of 2012, set out wage recommendations that excluded the energy component from any wage settlements in the event, as is currently the case, of rising energy prices. makes it possible to estimate how a reaction in other domestic prices and in private wages, in line with the direct impact of higher energy prices on the general price level, might affect activity and employment. if higher energy prices are fully passed through, the overall adverse impact on activity and employment, in terms of the divergence from the current projections, could be around 1. 5 pp in 2024. moreover, real disposable household income would decline,