Skyline Newsletter July 2023
General Elections Results 2023
On the 23rd July, Spain voted in the General elections to choose a new government. Once again, the centre right PP party (Partido Popular) gained majority seats in most regions, winning by a notable margin (136), although it was not enough to form a government.
The centre left PSOE (Partido Socialista Obrero Española) managed to retain the same number of seats as in the 2019 elections, wining just 2 more (122), but also fell short of the 176 required.
Expectations were similar to that of the recent regional elections where the PP would win and join with the far right VOX party to form a new government.
However, the voting was such that even with coalitions on each side, neither party would have enough seats to gain overall majority, and so negotiations have begun to see who can align with other parties, and form a government, and avoid another election..
Throughout Spanish democratic history, the winning party has always governed, either on its own or through coalition, which the PP party sustains is the rightful way to move forward, asking for other parties to abstain or to form a coalition with them.
However, the PSOE party, despite coming second seems like they may find a way to join forces with other left wing, and separatist parties to win back leadership.
Watch this post for an update…!
Interest rates and reducing inflation
The governor of the Bank of Spain, Pablo Hernández de Cos, has predicted that high interest rates will continue “for a long time” to reach the inflation objective of 2%.
De Cos has also explained that his forecasts call for a gradual reduction in underlying inflation due to the improvement in supply chains and the moderation in demand.
De Cos has qualified that “the intensity of these effects is uncertain, since they may not be in line with the effects that cause upward inflation.”
On the other hand, he explained that the regulator’s attention “is now turning to the response of wages and business margins” and the possible appearance of second-round effects. “The inflation projections for March assume a gradual recovery of real wages, which by the end of 2025 would be at a level similar to that of the first quarter of 2022,” he pointed out, adding that the current wage negotiations and the agreements signed point to increasing wage pressures.
As for business margins, he has anticipated a squeeze due to subdued demand, although this could be compromised if demand starts to pick up again.
Joke of the month
The Boss of a small company was complaining during a staff meeting that people didn’t respect him enough. Trying to change the attitude in the office he came in the next day with a sign for his door which read, “I am the boss”. Soon after, the secretary walked into his office after receiving a call, and said “your wife wants her sign back”.