Economist Gonzalo Bernardos argues that a rise in the CPI in the coming months could translate into higher nominal pensions and generate a "mirage effect" among retirees ahead of general elections.
The economist Gonzalo Bernardos has raised a reflection on the relationship between inflation trends, pension revaluation, and a possible early election. In an analysis shared on his social media, as reported by 20minutos, Bernardos questions why the PSOE might be interested in inflation rising in the next two months and why it has not wanted to lower it more before.
His argument is based on a fact: pensions are updated each year taking into account price developments. If the CPI rises in the months leading up to an election, the nominal increase in pensions for the following year will be greater, even though the real purchasing power of retirees does not improve.
"They prefer a 6% increase when inflation is 6%, rather than a 2% increase when the CPI is 2%"
Bernardos describes this phenomenon as a "mirage effect": in both scenarios, the outcome on purchasing power is identical, with no real increase, because the rise in income is offset by the increase in prices. The economist links this behaviour to the voting decisions of retirees and argues that part of this group may value the percentage increase in their pension more than the actual evolution of their purchasing power.
In his analysis, Bernardos also reviews the general elections of 2023 and points out two factors that, in his opinion, allowed Pedro Sánchez to remain at the helm of the Government: "the fear of Vox" and the increase in pensions. He highlights that pensions increased by 8.5% in 2023, a rise he describes as higher than any other annual increase in the 21st century.
Bernardos' reflection occurs in a political context marked by the parliamentary defeat of two housing decrees, which has led Sánchez to open a period of reflection on the possibility of bringing elections forward. Meanwhile, the housing camp at Puerta del Sol in Madrid is entering its seventh night with around 2,000 people, and tents are now extending to nearby streets such as Preciados and Arenal.
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