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Having launched the most intense monetary tightening cycle of recent decades, it appears that the central banks are on track to solve the unexpected upturn in inflation which the international economy has had to cope with since the first half of 2021.

The Spanish economy continues to have the highest structural unemployment rate in the European Union, despite having managed to reduce it substantially in recent years. To curb it, improvements are needed on three fronts: greater supply and demand for employment and better matching between the two.

After the experience of recent years, we know how political risk can alter the behaviour of key hypotheses in economic forecasting scenarios.

Monetary policy has reacted quickly and decisively to the COVID-19 pandemic. However, having successfully played the role of «fire-fighter», the ECB will have to remain highly active to support the revival of the economy.

2025 should be the year of monetary policy untightening, with the ECB and the Fed lowering their interest rates to neutral levels (around 2% and 3%, respectively). These rate cuts will be accompanied by another, less visible normalisation: the reduction of their balance sheets, which have grown exponentially in the last 15 years.

Although it is nothing new, it is still important to emphasise it: the latest available indicators for the Spanish economy have once again beaten expectations. Despite the continued weakness of Europe and the high global uncertainty, Spain’s economy continues to stand out on the international stage.

Stable economic outlook but with increasing risks: geopolitical instability, uncertainty and a lack of confidence.

With disinflation on track and some signs of a slowdown in economic activity and a cooling of the labour market, monetary policy is shifting gears and starting to dial back the monetary tightening of the past years: going from restrictive to neutral. The ECB and the Fed, along with other major central banks, have initiated this easing process with interest rate cuts, and they are expected to continue doing so in 2025. From there, we will seek to clarify the factors that will guide this new phase of monetary policy.

2025 will be a year in search of a new normal, threatened by the division between economic blocs. The best outcome would be to regain multilateral cooperation in order to tackle the new challenges and spread the risks together. 

In our previous article dedicated to analysing the evolution of investment in Spain, we focused on describing the pattern of investment by type of asset and by sector, and on comparing it with the euro area. In this second article, we want to focus on incentives for investment.

The indicators published in recent weeks confirm the good health of the Spanish economy, with growth in Q1 once again beating expectations and recording the highest rate among the major euro area economies.

The wealth of Portuguese households has increased in recent years and the distribution by level of wealth or employment status shows little difference with respect to the euro area. However, the proportion of liabilities that are borne by the less wealthy half of the population is relatively higher.

The evolution of the economy points to a change of phase: the beginning of a relaxation of monetary policy worldwide.

Nuestros economistas Clàudia Canals, Judit Montoriol y Oriol Carreras impartirán hoy un #WebinarCABK organizado por @AccionistasCABK para compartir las conclusiones de su dossier sobre el impacto del teletrabajo. ¡Participa!