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Presenting realtimeeconomics.caixabankresearch.com, a new website where you can track the developments in equality in Spain in real time.

The agrifood sector continues to suffer from the sharp rise in production costs and the impact of the drought. However, the decline in agricultural commodity and energy prices on international markets from the peaks reached in 2022 should help contain agricultural production costs and thereby moderate inflationary pressures on food. Nevertheless, the severe drought that has been affecting the Iberian Peninsula since last year has reduced the yields of a large number of crops such as cereals and fruits, impacting both prices (up) and the volume of exports (down). All in all, in value terms agrifood exports continued to grow at a good rate in S1 2023 due to the rise in prices, reflecting the high competitiveness of Spain’s agrifood sector despite the adverse conditions.

Despite the worsening economic situation there is a marked upward trend in the real estate sector with very strong demand and a notable rise in prices. For its part, the supply of new housing is being affected by the war in Ukraine as this has pushed up construction costs even further and aggravated the material supply problems due to bottlenecks in global value chains. Consequently, the misalignment between the demand and supply of housing has intensified, with the result that house prices are likely to continue rising. However, there are several counteracting factors that should help to curb the growth in demand and prices over the medium term, including the impact of inflation on real household income and the ECB’s interest rate hikes.

Rising production costs as a result of the war in Ukraine are affecting all the links in the food chain: production, processing, distribution and transport, although the primary sector has been particularly hard hit, also adversely affected by unfavourable weather conditions in the form of drought. Rising costs are being passed on to the food prices paid by end consumers, pushing up spending on food, particularly among lower-income households. The most positive note comes from the external sector: agrifood exports have continued to grow strongly in 2022 and competitiveness indicators do not seem to have worsened in spite of the price hikes.

The food price rally has begun to slow, but the cumulative increase since 2019 is significant and expenditure on food now represents a higher percentage of Spanish households’ consumption. The decline in agricultural and energy commodity prices in the international markets relative to their peaks reached in 2022 should help to contain agricultural production costs and thus to further ease the inflationary pressures on food over the coming quarters.

The olive oil industry is a deeply-rooted, traditional sector in Spain, is one of the most important in the country’s agricultural sector and plays a fundamental role from an economic, environmental, cultural and gastronomic point of view. In addition to being a source of income and employment in many rural areas, it also contributes towards territorial and social cohesion and the fight against depopulation, soil erosion and climate change.

Spain’s agrifood sector is enjoying an expansion in 2025, favoured by improved weather conditions, the containment of production costs and increased demand. All this translates into a gradual increase in production and exports, which have already recovered to pre-pandemic levels, as well as a more dynamic labour market, with job creation and a reduction in temporary employment. The outlook for the coming quarters is encouraging, although significant challenges remain, including the US tariff hikes and the growing impact of extreme weather events such as floods, droughts and fires.

El mercado de la vivienda en España está inmerso en una fase de creciente tensión, resultado de la combinación de una demanda fuerte, una oferta insuficiente y poco elástica y una elevada heterogeneidad territorial.

In 2021, a milestone was reached that was hard to imagine a year ago: the mass vaccination of a large part of the population in advanced countries. Although new waves of infection are occurring, in those countries where population vaccination levels are higher it is likely that activity and travel restrictions as severe as those that have set the pace of economic development since the outbreak of the pandemic will not have to be reimposed.

Spanish tourism has made a strong start to 2023. International tourist arrivals have returned to the levels of 2019 while records have been broken by international tourism expenditure. Domestic tourism has been growing since 2022 but with less momentum due to a combination of reduced purchasing power and greater outbound travel. Although tourism is currently one of the drivers of the Spanish economy, several headwinds are likely to appear in the coming quarters. The complicated macroeconomic outlook in the countries of origin of inbound tourists, the reactivation of more distant destinations for European and Spanish tourists, and competition from more economical destinations point to a slowdown in Spain’s tourism industry as we approach 2024.