IBERSOL | Annual Report 2021

ANNUAL REPORT 2021 Global Situation According to figures from the European Central Bank, the world econ- omy recovered significantly during 2021, although the persistence of bottlenecks on the side of supply, rising prices of raw materials, and the appearance of the Omicron strain of Covid-19 in the fourth quarter weighed down growth forecasts. At the beginning of 2022 the economic recovery of the eurozone was boosted by the fading of the impact of the Omicron strain of the coro- navirus (Covid-19). Supply bottlenecks showed some signs of letting up and improvement of the labour market accelerated. Inflation continued surprisingly high, rising to 5.8% in February, reflecting the transmission of the higher prices of raw material and pressure on production costs because of disturbances to global supply chains. This scenario of sustained recovery was strongly shaken by the begin- ning of the war in Ukraine. The Russian invasion of Ukraine is expected to have a relevant impact on economic activity and on inflation due to rising prices of energy prod- ucts and raw material, global trade disturbances and a drop in the con- fidence of economic agents. The scope of these effects will depend on how the conflict evolves, the impact of current sanctions and subse- quent measures that might be implemented. ECONOMIC FRAMEWORK 11