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Daniel Lacalle, chief economist at Tressis, sits with José Miguel Maté, CEO of the firm, to analyze how 2019 has gone, and discuss the prospects that await investors in this 2020.

Maté gets to the point, and directly raises the key issue in a meeting of perspectives. What will we see in 2020 in terms of growth? Without concrete figures on the table, Lacalle remembers what has happened in recent years, and his perspectives for the next: “We have a low-growth environment,” he says, and explains to defend his perspective that “expectations of change of trend if you have been promoting low productivity for a decade, debt has increased a lot, and economies generate less momentum. ” The summary, for the economist, is that “there will be no high levels of growth, but there will be a cycle that extends over time.”

By region, Lacalle believes that in the United States “there is capacity to continue growing”, since “a huge part of the American economy comes from intellectual property, so it is not so dependent on other countries. And it is already an oil exporter I think it can grow at this rate for a while. The recessive signals have been denied, little by little, “he says.

However, their perspectives are not so optimistic for Europe: “It is not that it has bottomed out, it is that Europe has been at the bottom for a long time,” he says, “You have to understand that it is an economy without technological thrust like China has and Second, the demographic issue, which in macro analysis tends to be ignored, the longevity of the population is important in consumption factors, the third problem is that it is an economic entity in which the main driver is public spending , which generates lower productivity growth, and growth in general, “he explains.

There are some lights in the Old Continent, yes, although they have more to do with the ability to take advantage of the growth that does take place in other regions of the world: “Growth, even if it is poor, comes from abroad. And the services sector, despite the aging population, it benefits from the growth of emerging countries. It has clearly offset the recession in the manufacturing sector. ” But, Lacalle warns, “this will not happen for 5 years.”

The impact of inflation on protests throughout the world

When Maté and Lacalle enter to discuss inflation, and how it does not finish reaching the levels that central banks would like, Lacalle establishes a relationship between inflation and the protests that took place in 2019 in different regions of the world: “The key word is” official “inflation, as opposed to” unofficial “inflation.” Official “inflation is difficult. Excess debt is disinflationary. Technological advances too, and the change of a growth pattern from industry to services , so it is. What we have to understand is that the probability of seeing an inflationary rebound, as the BCS would like, is low. Why without inflation there are protests around the world for the rising cost of living? “

The expert exposes some figures: “In China the official inflation is 2%, and the pig has increased 60%. In the Middle East the meat has risen 50%: Much of what happens comes from the impact of the average citizen, at They say that there is no inflation, and he notices it, he notes that there are. Assets that are not included in the CPI; such as rent, they generate a perception of the citizen, very different from that informed by the central bank, which tells him that there is no inflation, and that it consumes, “he emphasizes.

The role of central banks as a centerpiece of the current market situation, with low inflation despite the stimuli they have been introducing for years, leads Lacalle to put them at the center of criticism. The review that Christine Lagarde, president of the organization, is preparing does not believe that it ends up giving great results: “It will say that what needs to be done is much more. The team of economists close to the ECB, BOJ, and Fed, are people who they think that the reason why there is no inflation that is like, is because all of us are not consuming or spending what we should, “he says.

An admirable defense

To conclude, Maté and Lacalle are asked about the situation of the European banking sector, very punished by the policies of central banks, and that, however, in Lacalle's opinion, “the European banking sector is admirably defending itself against the type context , strengthening its balance in an environment where from the monetary policy the capacity to generate benefits sinks “. That is why, in the face of investment, “the value is in the bonds. It is the part that is defending at all costs, and very well. They have increased capital of maximum quality by about 1% per year. That is why they have revalued bonds while the stock market falls. If we look for value in banks, we will have it more in bonds than in their shares, “he says.