De Guindos says the eurozone economy is doing better than expected and the interest rate level is adequate

European Central Bank Vice-President Luis de Guindoshas pointed out that the eurozone economy is acting "better" than they expected months ago and has ensured that the current level of interest rates is "adequate" given inflation forecasts.

De Guindos made these considerations in the framework of the Gran Via Forum, which began today in Bilbao with the BB Foundation, attended for the first time by the representative of the ECB.

The Vice-President of the European Central Bank has analysed the economic situation and prospects in the euro area and recalled that in December the projections for this area will be updated, but has advanced that they will not be 'very different' from those published by the European Commission. 

He has said that the evolution of inflation in the euro area is' positive 'because it has been' slowing down 'and is approaching 2%. He has added that what is most worrying is service inflation, but he has stressed that there is generally' good news' about inflation forecasts, which, in his words, has had an impact on the ECB's monetary policy and recalled that interest rates have fallen from 4% to 2%.

The economist has pointed out that the rates have not been changed at the last three meetings of the Council because they consider the current interest rate to be "adequate".

Housing, Spain's "fundamental problem"

The ECB's vice president has assured us that the Spanish economy "is doing well"in terms of growth, with levels close to 3%, well above what the EU currently expects for the eurozone (1.3% this year).

We need to look at the factors that influence this GDP growth and see if this model is "sustainable over time." De Guindos has pointed out that this growth is based on a "very important" population growth dueto immigration.

In this regard, he has warned that efforts must be made to "maximize" the benefits of immigration and "minimize potential costs", with housing being the most prominent in these costs. "When you have a strong growth in the formation of households, as a result of immigration and population growth, you have to cope with this increasein demand, with an increase in supply ", he has stressed. 

He adds that the first to absorb the new situation is not the market for new housing that "reacts a little later", but the rental market. In this regard, he warns that "regulation is limiting the supply of rental housing ".

"And the consequence of that," he says, "is that when you have a large increase in demand and supply is not enough to meet demand, rental prices immediately rise, "and he points out that this is the" current problem "facing Spain, .