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Why is productivity so low in Spain and why has it grown so little in recent years? Although the answer is complex and a whole range of factors are involved, two of the key causes of the Spanish economy’s low labour productivity, as well as the low growth thereof, are the country’s production specialisation and the small size of its companies.

November was dominated by a sharp upturn in volatility in the stock markets, amid doubts about the potential exuberance of AI investments in the US and the high valuations of the big tech firms. Sentiment recovered towards the end of the month, with the expectation that the Fed could continue its rate cuts in December, but concern shifted to Japan in the sovereign debt markets.

More than three months into the conflict in the Middle East, the effects of the supply shock triggered by the surge in energy prices will now become increasingly evident in the inflation and growth data. The combination of uncertainty and resilience that has characterised the recent behaviour of the global economy makes for a fragile balance, especially with geopolitical risk remaining so high.

The international economy once again conveys a sense of uneasy calm at the start of the final quarter of the year. The combination of oil prices close to 100 dollars, fragile fiscal outlooks in countries such as France and the US, high investment needs, structurally higher real interest rates and more sensitive short-term inflation expectations creates a highly challenging scenario. 

Q2 2025 began with all bets placed on a slowdown in the growth of the Spanish economy. In early April, and after months of threats, the Trump administration announced bilateral tariffs and catapulted the main uncertainty indicators to all-time highs. Weeks later, a blackout left the Iberian Peninsula without electricity for a day. Moreover, all this happened in an environment in which the euro area economy was once again showing signs of cooling.

Globofriction captures one of the most characteristic features of the current era: simultaneous attraction and repulsion between economic blocs. On the one hand, they are competing for technological leadership, aware that the associated benefits go far beyond those currently gained by the companies leading innovation. Historically, countries that have led an economic revolution have ended up consolidating themselves as global powers in the following decades. On the other hand, economic blocs remain deeply intertwined by trade and financial interdependencies. This is the force of globalisation, the benefits of which are well known and remain very present.

With the 2023 data now published for almost all the main macroeconomic variables, we have revised our macroeconomic forecast scenario for the Portuguese economy for 2024-2026. That said, the changes are not particularly significant, with the exception of the forecasts related to the real estate market.

The closure of the Strait of Hormuz since the start of the conflict has driven up the oil price to around 100 dollars per barrel in recent months, while the reduction in inventories has helped absorb part of the energy shock. The indicators suggest that the energy market will remain strained and that geopolitical risk will continue to apply upward pressure on prices.

Social cohesion, together with the ecological and digital pillars, constitute the key spheres of action of the Recovery, Transformation and Resilience Plan (RTRP). This is a plan which outlines the roadmap for a robust, inclusive and resilient economic recovery, not only to tackle the crisis triggered by the COVID-19 pandemic but also to respond to the challenges of the next decade.

The conflict now widely referred to as the Third Gulf War has caused the largest disruption on record in the global energy market. The main point of tension is the Strait of Hormuz, a key maritime route through which around 20% of global oil and liquefied natural gas (LNG) passes. With the strait effectively closed, a large share of the region’s energy production is blocked. Energy markets reflected this scenario: the price of oil hovered around 100 dollars per barrel in the final weeks of March, driven by supply disruptions, attacks on tankers and damage to critical energy infrastructure.

The American political philosopher John Rawls coined the concept of the «veil of ignorance». Under this somewhat cryptic expression lies a suggestive notion: in order to determine which society is the best one to live in, we must ask ourselves: «if I did not know what position I would have in this society, in what kind of society would I choose to live in at birth?»

We are therefore heading towards a context with higher tariffs and in which, most likely, there will be some reconfiguration of global value chains in an attempt to compensate, insofar as possible, for the loss of attractiveness of the US market. Consequently, we are moving towards a world with greater fragmentation, lower economic growth and the risk of higher inflation.

The November activity indicators point to a very positive Q4 for the Spanish economy, while inflation stabilises at still somewhat high levels and the house price rally shows no sign of easing. The current account surplus is reduced by the strength of imports, as is the public deficit compared to last year.

The Spanish economy continues to show significant dynamism, with better performance than expected, driven by domestic demand (both private consumption and investment). Among other factors, this is thanks to the strong financial situation of both households and firms, favourable financing conditions, the normalisation of inflation and the strength of the labour market.

The conflict in the Middle East continues to drag on, although the global economy remains resilient. In the euro area, business climate surveys indicate a dynamic third quarter, although actual activity data dampen this optimism, particularly in Germany. Meanwhile, in the United States, inflation remains under upward pressure due to rising energy costs, while the labour market remains highly volatile.

Sentiment improves in the US, but remains somewhat hesitant in the rest of the world, while the central banks make progress in the «gradual» monetary easing process.