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In 2023, Spain’s tourism sector remained on the path of recovery and growth, surpassing initial expectations and breaking records, not only in nominal expenditure but also in real terms. In 2024, we expect the positive trend for Spain’s tourism sector to continue and its GDP to increase by 2.5%, with the sector outpacing the overall economy and remaining one of the drivers of the Spanish economy.

Tourism ended this year’s summer season in great shape with international tourist arrivals coming very close to the records set in 2019, a year that was extremely positive for the industry. Domestic tourism has also continued to post very good figures. However, the macroeconomic scenario represents a risk for the trend in tourism activity over the coming quarters due to high inflation and the economic slowdown in Europe. Nevertheless, we believe that tourism demand still enjoys significant levers for growth in the coming year and we therefore expect the sector to complete its recovery in 2023.

The Spanish agrifood sector has begun to recover after two years of decline, thanks to the moderation of production costs and the easing of the drought. However, the effects of both of these shocks still persist and the sector continues to face major challenges that are limiting its structural growth capacity.

Air passenger transport is one of the mainstays of the tourism sector's value chain. For this reason, and in a similar way to the rest of the sector, it experienced a huge slump in 2020 in the wake of COVID-19. Airlines are currently having to tackle a combination of high capital costs due to their large structures and an almost total lack of operating income. The evident need for liquidity among Europe's airlines has led some governments to inject public capital to prevent their collapse. However, 2021 looks like being the watershed the tourism sector needs: the progress made by the vaccination roll-outs and the approval of measures such as the health passport will be crucial for air passenger transport to embark on the road to recovery and return to being one of the mainstays of tourism.

Foreign purchases in Spain have made a surprisingly strong recovery after the pandemic-induced restrictions were lifted. Indicators related to purchase intent suggest that this positive trend will continue in the short term, especially among the German and Nordic populations. The long-term outlook for foreign demand is also promising considering the demographic trends in Europe: the imminent retirement of a large generation of Europeans points to a significant increase in potential demand, especially between 2026 and 2030. Although Spain has considerable strong points to attract this demand, such as the high competitiveness of its tourism industry and the country’s perceived safety, the importance of creating an attractive regulatory and fiscal environment, whilst also adopting appropriate housing policies to mitigate its impact on the local population, should not be underestimated.

The real estate market is one of the main channels through which monetary policy is passed on to the real economy. Tighter financial conditions are feeding through to mortgage interest rates and are cooling down the demand for housing. Given the notable tightening of monetary policy over the past year in many of the advanced economies, in this article we document the change in trend in international real estate markets and analyse the extent of the adjustment that may lie ahead.

The collapse of tourism in Spain in the wake of COVID-19 has pushed the tourism industry to undertake major price adjustments and the hotel sector has been the greatest exponent of this trend. According to data from the National Statistics Institute, the price per room per day charged by hotels in the summer of 2020 was 16% lower than the previous year. However, this huge price cut does not seem to have played a decisive role in reviving demand in some regions. The change in travel preferences brought about by the pandemic has meant that tourists have opted for nearby, familiar and less congested destinations, focusing less on price and thereby limiting the success of big reductions in hotel prices.

Spain’s automotive sector is trying to find its place in the new global ecosystem, having overcome the adverse environment of recent years, marked by the international supply problems affecting essential inputs such as microchips and semiconductors, as well as increases in prices and interest rates.

Although manufacturing is not among the sectors hardest hit by the crisis, the COVID-19 shock occurred within a context of a prolonged weakness in the sector, not only in Spain but in Europe as a whole. After the initial harsh adjustment, brief and uneven across the various branches of activity, the sector quickly picked up again, approaching its pre-pandemic levels of activity and employment. The outlook for 2021 and 2022 is favourable, driven especially by exports and the investments made via the Recovery, Transformation and Resilience Plan (RTRP). Recent disruptions in global supply chains, caused by global transportation bottlenecks and component shortages, will have a limited, temporary impact.

One of the determining factors of the economic scenario is the impact of the ECB’s interest rate hikes on the consumption and investment decisions taken by economic agents. In this article, we examine the financial position of the different branches of Spain’s manufacturing industry in an attempt to determine to what extent they’re exposed to this tightening of financial conditions.

In the course of 2021 we have seen that, in the wake of the pandemic, a misalignment has emerged in the real estate sector between a demand that has recovered very quickly and a supply that is more dependent on structural factors and therefore continues to lag behind. As a result of this misalignment, house prices have started an upward trend which may continue to some extent in the coming quarters as a result of higher production costs in the sector and problems with the supply of certain raw materials. Nevertheless, in the medium term, as new supply enters the market and tensions in global supply chains ease, prices should return to a growth rate that is more in line with the trend in household income.