Digital technologies permeate the debate on the future of the economy. Monetary policy and its main vehicle, money, are no exception. More and more products are sold over the internet and cash is used less and less. This new digital economy creates new demands on the financial sector and digital money emerges as a new means of payment that appeals to consumers. How does all this affect monetary policy? What can central banks do (and what are they doing) about it?
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Today marks the publication of the first CaixaBank Sectoral Digitalisation Index, a tool which measures Spanish companies’ degree of digitalisation in relation to the European technological frontier.
The coronavirus pandemic took the world by surprise and brought international tourism almost to a complete halt. The initial phases of a relative recovery are restoring connectivity between those outbound markets and tourist destinations that have controlled the spread of the coronavirus. However, the sector will have to undertake a far-reaching and rapid transformation to adapt to the new, post-COVID-19 international tourist who will demand more personalised, flexible and, above all, safer services.
Almost five years have passed since the historic agreements to finance the EU’s largest joint economic stimulus programme were reached. The Next Generation EU (NGEU) funds were designed with the dual target of helping to overcome, in the short term, the adverse effects of the COVID-19 pandemic and, in the medium term, to support the structural transformation of the European economy. Here, we review what has been achieved to date and what remains pending.
In our latest article on the NGEU, we answer the main questions about the European Union's increased debt issuance and its impact on financial markets.
COVID-19 is causing a sharp increase in public debt. This may raise concerns but its sustainability is not in question: the ECB's monetary policy, perpetually low interest rates and longer maturities are supporting Europe's economies and alleviating the financial burden.
In this article, we will focus on the policies that must drive the digital transformation of EU Member States and, in particular, the Spanish economy.
For the first time in many months, the outlook for the European economy has begun to improve. We analyse the factors behind this improvement and share our vision of the outlook for growth and inflation in the euro area in 2023.
The risk of overheating in the US economy has increased due to the latest and significant fiscal spending measures and the bottlenecks that are beginning to emerge in many sectors, in a context of strong recovery in economic activity. Unlike the US, in Europe the risk of inflation being persistently higher than expected is lower. Furthermore, we believe the ECB would take the necessary steps to moderate the effect that a potential rate hike in the US would have on the European yield curve.
Euro area inflation has been steadily declining for one clear reason: easing energy tensions. The question now is whether it will continue to fall rapidly towards 2% or whether it will encounter new pitfalls that hinder its downward path.
In the last 20 years, the use of digital means of payment has steadily increased in Spain. Card purchases in Spain have gone from around 1 billion transactions in the early 2000s to over 4.5 billion in 2019. But are all generations joining this transition at the same speed?
The price of Bitcoin reached 50,000 euros at the end of March, around 10 times more than 12 months ago and 3 times more than the peak reached in December 2017. The 10,000 bitcoins that were paid for two pizzas in 2010 would now be worth some 500 million euros, and the value of all the bitcoins in circulation is approaching 1 trillion euros, a figure that lies between the market capitalisation of Google and Facebook. These are dizzying figures that make us wonder whether we are facing an enormous bubble.
We identify the macroeconomic factors that affect the evolution of international tourism in Spain, including income growth in the source countries, inflation, geopolitical risk and exchange rates, and we estimate how many international tourists will visit Spain in 2024.
Extreme drought and rising costs have created a perfect storm that has nonetheless failed to dampen the high spirits of Spain’s agrifood exports in recent years. The decline in the volume of exports experienced by the sector, offset by the increase in prices, is the result of an adverse situation but the various competitiveness indicators look resilient and global market shares are still behaving very favourably. Even so, the sector must continue to invest in order to ensure its production becomes even more digitised, sustainable and competitive, a mission of vital importance given the huge challenge posed by climate change for the country.
The Spanish economy has a diverse, export-oriented and highly productive manufacturing sector. However, the business fabric is still highly fragmented compared to German industry, a European benchmark. Increasing company size and the productivity of companies, through investment in R&D and adopting new digital technologies, and moving towards Industry 4.0 are key in the increasing competitiveness of a fundamental sector for the economy and for the Spanish foreign sector. The sector must also evolve towards a more sustainable industrial model: only companies that successfully undertake the energy transition will be able to compete in a new environment in which sustainability will be a prerequisite for continuing to operate in the market.
Agrifood is the main sector for Spanish industry. The sector has strong roots in Spain, generates stable employment and is very open to other markets. It also tends to have a highly fragmented business structure dominated by small firms and a few large companies that are less productive than their European counterparts. Increasing company size and boosting the productivity of larger firms through investment in R&D and adopting new technologies would help to improve the competitiveness of a key industry for the economy and society as a whole.
The slowdown in exports has been one of the main sources of weakness in the Spanish economy in recent quarters. Manufacturing is particularly dependent on sales abroad and has been the epicentre of the deterioration in exports of goods.
The impact on the EU of a universal tariff on US imports of goods goes beyond the direct effect it will have on exporting companies, as it will also be felt indirectly across the economy as a whole and throughout European and global value chains.
The NGEU funds and the national investment programmes in Germany and France are the result of a long process of changes in the big economic blocs, accelerated by COVID and the war in Ukraine. These efforts seek to redefine and adapt production models to the energy transition and digitalisation in a context of uncertainty and new geopolitical dynamics.