2021-11-07-牛津经济研究院-Spain_Strong_wage_gains_but_limited_risk_of_inflationary_cycle_3页_257kb

Summary: Strong Wage Gains but Limited Risk of Inflationary Cycle in Spain

Despite Spain's inflation reaching a 30-year high driven by energy prices, the risk of a sustained inflationary cycle remains limited due to several factors:

1. Wage Growth Projections
   Wages are expected to grow at their fastest pace in a decade (2.5% in 2022), but this is still below the levels seen in the 2000s. High unemployment rates and low labor shortages (particularly in key sectors like trade, transport, and hospitality) will cap wage increases and prevent significant "second-round" effects.

2. Energy-Driven Inflation
   Current inflation is primarily driven by volatile energy prices. If energy prices fall sharply in the second half of 2022, inflation is expected to decrease significantly. A sustained wage-inflation cycle would only emerge if energy costs persistently drive wages higher, but current evidence suggests limited pass-through effects.

3. Core Inflation and Worker Compensation
   While wage growth will contribute to higher core inflation in 2022 (forecasted at 1.5%), it remains well below the peaks seen in previous decades. Core inflation is influenced by energy costs only marginally, with most categories still keeping inflation rates below 2%.

4. Risk Factors
   Two key risks could prolong inflation: a persistent energy crunch or stronger-than-expected price transmission from energy costs to core services. However, current data shows inflationary pressures are concentrated on energy and volatile services, with core inflation remaining moderate.

In conclusion, although wage gains are significant, they do not pose a high threat to a durable inflationary cycle unless energy dynamics worsen or labor market constraints reduce.