Inflation driving fears of economic crisis. | Archive

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The deputy CEO of the La Caixa Foundation, Marc Simón, is warning of the risk of a deep economic crisis in the coming months and of increased social inequalities.

Simón was speaking on Monday at a press conference with the director of CaixaBank in the Balearics, María Cruz Rivera, and the director of CaixaForum Palma, Margarita Pérez-Villegas. He said that "economic changes are moving very fast due to inflation and the increase in the cost of energy". These are indicators which point to "an economic crisis in the months to come and a very clear risk of increased social inequality".

He added that the lockdown during the toughest phase of the pandemic in 2020 was a key factor in the growth in the number of people in vulnerable situations. This was because many families are sustained by work in "informal economy". "If they cannot go out, they have no income."

He added that the increase in the minimum vital income (a social security benefit) has not had the desired effects. "It has only reached a part of the population, not all that needs it."

In terms of general economic prospects, Rivera said that although growth forecasts for the Balearics have been lowered - as has been the case in other Spanish regions - the forecast for the Balearics is still above the national average, "thanks largely to the recovery of the tourism sector".