The director of the Alava employers is cautious when talking about a possible recession. He explains that growth is “very moderate” and it must be taken into account that “as an exporting province, the destination countries are on the verge of recession.”
“It is true that to overcome the situation generated by the covid pandemic, the deployment of aid was essential to maintain the economic fabric, but now I miss public aid to companies to alleviate this excessive increase in the cost of energy”. This is how the general director of SEA-Empresas Alavesas has expressed himself, John Ugarte, when analyzing the current situation that companies are experiencing. In his opinion, it is almost impossible for an electro-intensive company to face this situation: “for example, the invoice of a bakery has multiplied by three or four, but it cannot apply that increase to the loaf of bread”.
Interviewed on the show “Boulevard” of Radio Euskadi, the head of SEA has also referred to the CPI data for October published today, according to which the year-on-year CPI falls to 6.9% in the CAV. Although he has recognized that “without a doubt, it is a positive figure”, he has emphasized that “we are still at very high figures”. “You have to take into account the starting point. In recent years the price of electricity has multiplied by two and that of gas by four. In our companies there has been the perfect storm for the rise: post-covid costs, costs of energy, financial costs (…) Profitability is affected. Today, we have work, but profitability is lacking,” he clarified.
In that sense, he has been cautious when talking about a possible recession. He did not want to convey pessimism, but he did make it clear that growth “is still very moderate and is on the limit.” It must be taken into account, he added, that “as an exporting province, the countries of destination are on the verge of recession”.
In this context, Ugarte has assured that the companies are “making a great effort to maintain employment”, but “if production is affected it will be difficult to maintain that situation”. “We are at pre-Covid employment levels, but the level of GDP has not reached pre-pandemic levels.”
Asked about the budget project for 2023 of the Basque Government, the director of the Alava business association has valued the efforts of the institutions and has called for a bold exercise, especially in fiscal matters. He believes that the CAV has “an instrument like the Economic Agreement that offers a lot of independence”, but “we should use it more boldly”. “You have to take the good words to the practical field (…) we advocate competitive taxation.”
Finally, he also spoke about the possible investment of 1.2 billion euros that the multinational Mercedes Benz could make in Vitoria-Gasteiz. He has been optimistic because “we have all the wicks to be awarded” and hopes that the company makes the decision “as soon as possible.”
Source: Eitb
I’m Tifany Hawkins, a professional journalist with years of experience in news reporting. I currently work for a prominent news website and write articles for 24NewsReporters as an author. My primary focus is on economy-related stories, though I am also experienced in several other areas of journalism.