One year on: global resilience to the tariff storm

It may be hard to believe, but it has been 12 dizzying months since Trump’s victory in the US presidential election. Taking advantage of the anniversary and the upcoming year end, we have prepared our traditional Dossier analysing the trends and key elements that will determine the behaviour of the economy in 2026. We start from the basis that both international and Spanish economic activity have once again shown a high degree of resilience this year in overcoming the noise and uncertainty caused by the use of trade or finance as instruments at the service of politics. Moreover, this has occurred in a context in which, like in 2023 and 2024, the forecasts have steadily improved over the course of the year thanks to the reduction of trade uncertainty, favourable financial conditions and the ability and flexibility of economic agents to adapt their consumption and investment decisions to a complex environment.

Looking ahead to 2026, geopolitics will continue to play a fundamental role, bearing in mind the reordering of the globalisation process in which the international economy has been immersed since the pandemic. In addition to the evolution of the ongoing wars, the key question in the short term will be whether the trend towards a more fragmented world will accelerate or, in order to compensate for the increased restrictions on trade with the US, progress will be made in the search for new agreements between natural trading partners (the EU, ASEAN, Canada, Australia, etc.). This should not be incompatible with the continuation of the widespread search for strategic autonomy. In this regard, for Europe, the key in 2026 will be how to reconcile the desire to reduce external dependence (in industry, defence, etc.) with the sustainability of public debt. This is a challenge of the utmost complexity, marked by tensions between fiscal discipline, necessary investments (the ECB has raised the estimates of the Draghi report to 1.2 trillion euros between public and private investment) and geopolitical demands. This European fiscal dilemma can only be solved through a combination of higher potential growth, greater efficiency in public spending and greater flexibility in fiscal rules. Countries such as Belgium and France are already in the fire because of fiscal inertia that is difficult to reverse and which is being reflected in the realignment of risk premiums in Europe.

However, the key to the stability of the economic and financial scenario lies in what shape the trade relationship between China and the US finally takes, and this will affect the two sectors that are key for the development of AI (rare earths and microchips) and in which there is mutual dependence. An optimal balance would allow the positive inertia of AI investment on growth (especially visible in the US) to be maintained in the short term, while increasing the likelihood that this innovation will end up manifesting itself in productivity gains and increased potential growth in the medium term, thereby offsetting the negative effects of demography and economic fragmentation. In fact, AI is an example of positive uncertainty, as it is expected to bring greater growth and productivity, but we do not know for sure how much. The key question, therefore, is whether all this investment effort will yield an adequate dividend, which will be essential for diluting the financial risk caused by the confluence of fiscal tensions, uncertainty and geopolitical tensions. This, coupled with demanding stock market valuations, forms an environment in which financial stability may be tested in 2026, with certain segments of private credit under the spotlight. Central banks have the tools needed to quell any fires that ignite along the way, although the degrees of freedom are also narrower following the efforts of the past decade.

In this challenging context, the Spanish economy has continued to show strong dynamism, allowing it to end the year with an average growth rate very close to 3%. The most notable development this year has been the shift towards domestic demand as a driver of growth, despite the strong performance of exports (thanks to services). For 2026, the trends will remain positive, thanks to the expected momentum from European funds, demographics, accommodative financial conditions, a high household savings rate and residential investment responding to the increase in demand. All this leads us to anticipate a growth rate of 2.1% in 2026.

In short, next year the economy will continue to be exposed to the combination of new underlying trends (restrictions on trade and migration movements, AI boom, etc.) and short-term challenges (limited fiscal space, high valuations in financial markets, etc.). This will be a year in which the ability to question the assumptions behind economic projections will once again be decisive, as will be a flexible approach to decision-making.