Advance estimates of the consumer price index (CPI) indicate that annual inflation in Spain for the month of July 2022 rose to 10.8%.
with this number the inflation rate of the Iberian country is higher than 10.2% reached last June, when it registered a historic mark not seen for 37 years.
The current data represents at most nearly 38 yearssince September 1984. This is a growth that is significantly affecting investors in traditional markets, according to data presented by Spain’s National Securities Market Commission (CNMV).
The agency published a communicated this July 29 in which he presents the financial market statistics so far in 2022. In it he states that due to the inflationary rebound, the financial market stress indicator reached the highest levels at the end of the first half of this year.
The stress indicator is a number that provides a real-time measure of systemic risk in the financial system. The score ranges from 0 (very low constraint) to 1 (very high constraint).
According to the CNMV at the end of June and so far in July 2022 the the indicator is above 0.5, signaling high stress in the market.
The indicator started at 0.24 and ended the semester at a yearly high of 0.501, which corresponds to a high stress level, a little above the upper threshold of the average stress level. Two highs were recorded during the semester, 0.47 and 0.50, reached at specific times of high uncertainty.
CNMV Financial Stability Rating.
The CNMV explains that the upward trend observed on the stress indicator, since the beginning of this year, It was caused mainly by inflation.. Even if the lower growth expected in the euro zone in the current economic context also has an impact. A fact that “generates a complex environment with many sources of uncertainty”.
The year began with an increase in inflation beyond what was expected in the previous months, which, far from calming down, was again driven by the rise in the prices of raw materials and related energy. to the geopolitical situation.
CNMV Financial Stability Rating.
Thus, the two stress indicator peaks observed by the CNMV (0.47 at the start of the year and the most recent 0.50) correspond to critical situations in the Spanish economy.
The first peak of the indicator occurred with the start of the war in Ukraine (in February 2022). Whereas the second – the highest – occurred in recent months“after a more advanced and intense monetary policy tightening than expected”.
The letter recalls that Spain, as a member of the European Union, is also affected by raise interest rates by 0.5%. A percentage compiled by the European Central Bank on July 21, as reported by CriptoNoticias.
Bitcoin, the other side of the coin
However, beyond the uncertainty and stress that the inflationary scenario generates among a large part of the Spanish population and investors, Bitcoin shows another side of the crisis.
This is emphasized by the bitcoiners and companies linked to the ecosystem that have settled in the European country. This is the case of Enrique de los Reyes, representative of Bitbase, who observes that many Spaniards have seen in the current situation an opportunity to continue to grow.
On this topic, the executive offered an interview earlier this year at CriptoNoticias. He indicated that more than 5 million Spaniards have embraced bitcoin and other cryptocurrencies as an alternative means of investment.
He therefore deduces that with rising inflation, rising commodity prices, and a depreciation in the value of the euro due to inorganic money printing, Spain they need to look for options to help them deal with the situation.
This is an increasing level of adoption that has been approved by the Bank of Spain, despite his criticism of Bitcoin.
In a report presented in April this year, the Bank admitted that 12% of Spanish adults own crypto assets. He also located the economy of Spain as one of the most active with cryptocurrencies.
The figures also position the country in 5th position among those with the most cryptocurrency movement in Europe, mobilizing approximately 60,000 million euros.