The World Bank has joined this Tuesday the chorus of voices that ask the Government to rethink its measures to deal with the escalation in energy prices and a much more selective approach to aid to cushion this impact. The appeal to this strategic shift has not been direct in this case, but it has been forceful. The global economic outlook report released this Tuesday by the institution severely questions the governments that have chosen to respond to the rise in energy prices with energy subsidies to cushion their impact on households.
"Policy responses to past energy 'shocks' show that some policies can be very effective and beneficial, such as increasing energy efficiency or boosting renewable energies, while others can lead to market distortions and environmental problems, such as measures of price control", maintains the report, which then specifies what it refers to.
The message from the World Bank implies a slap on the wrist to the economic policy response applied by the Government, which has not only addressed a very costly policy of tax cuts to reduce the cost of electricity bills for families, but has also approved a linear bonus of 20 cents per liter on the price of fossil fuels and finalizes, not without problems, with the European Commission one more reform to limit the price of gas in the Iberian market, another price control measure, such as those questioned from the organism.
The World Bank's economic outlook report, which does not give forecasts for Spain, applies a cut of 1.3 points to global growth in 2022 (from 4.1% to 2.9%) and an even more relevant one, of 1, 7 points, to the growth of the euro area (from 4.2% to 2.5%). In fact, it points to the euro area as the major economic region most affected by the effects of the war in Ukraine.
The World Bank understands that the passing of the months is increasing the risk that the inflationary episode will not subside in the second half of this year, as the consensus of analysts predicts, but will continue until well into 2023, and also points out the growing risk of global stagflation like that which occurred in the oil crisis of the 1970s. The concept defines an episode of high inflation with no growth, which has very negative effects on the well-being of citizens and translates into a general and permanent impoverishment of the population.