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In October, the main stock market indices reached all-time highs, the dollar appreciated, sovereign debt yields declined and euro area peripheral spreads narrowed. Commodities exhibited disparity between the rise in metals and the decline in crude oil prices. The central banks fulfilled expectations: the Fed cut rates and the ECB kept them unchanged.

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.

The volatility in commodity prices since the outbreak of the pandemic continues to be a key factor for the economic outlook, given the implications for production costs and the prices consumers pay.

In this fourth and last article of the Dossier “Solidarity in Spain: snapshot of a committed society”, we analyse, in collaboration with Pompeu Fabra University, the change in the aggregate volume and in the number of donations that were made after the floods in Valencia based on CaixaBank banking transactions in order to better understand the charitable response to this emergency. 

One of the hot economic topics of today is the impact that a tightening of the financial conditions will have on the cost of Spanish public debt. Since the beginning of the year, we have witnessed a rebound in euro area sovereign yields and in risk premiums of the periphery, including that of Spain. Thus, the question arises as to how sensitive the general government’s cost of financing will be to a changing and highly uncertain macro-financial environment.

The global economy sustains the momentum, but pockets of instability persist. The US faces the impact of the longest shutdown in its history; the euro area holds up but lacks momentum, and China’s slowdown is accentuated at the end of the year.

Having overcome the crisis triggered by the pandemic, which caused debt-to-GDP levels to skyrocket, debt ratios have now resumed the downward trajectory they were on prior to COVID. In particular, in the private sector, both businesses and households already have lower levels of debt than before the pandemic and much lower than they had during the financial crisis of 2008. All this, together with the greater weight of fixed-rate debt, puts them in a less vulnerable position to cope with the rise in interest rates.

We explore some of the pension reforms implemented in other countries which, according to the economic literature and various international organisations, have best managed to navigate the uncertainty involved in ensuring the sustainability of the pension system.

We analyse the changes that have occurred in the flow of departures from the Spanish labour market in recent years, and the effect of the entry into force of the latest labour reform.

Between the 2nd and 5th of August, the financial markets experienced their most turbulent sessions in years, triggered by hasty fears of a US recession and an unexpected decision by the Bank of Japan that caused a spike in volatility. Since then the markets have turned a page, rendering those declines of early August no more than a scare and restating the soft-landing scenario as being the most likely.

The Spanish economy is growing at a good pace – more so than expected – and this leads us here at CaixaBank Research to revise our growth forecasts for 2025 upwards from 2.3% to 2.5%. Despite the good news, the focus is not on the improvement in the forecasts, but rather on the uncertainty that surrounds them. 

Improving the visibility of the economy’s performance in the short term remains fraught with significant challenges in the medium term, in an environment in which we will see major transformations in the coming years.

We assess the situation of risk premia in the euro area periphery and the tools available to the ECB (flexible reinvestments under the PEPP and TPI) to curb their rise.

The partial reopening of the Strait of Hormuz following the recent agreement signed between the US and Iran has significantly eased tensions in the energy markets, reducing the pressure that has been building on the economy and dispelling the spectre of a slowdown.

In the US, two major economic investment and modernisation plans have been launched in recent years which represent a very different model from the European one, with a more protectionist approach. The transformative efforts in energy and technology did not arise from the need to boost the economy after COVID, as was the case in the euro area with the European NGEU funds, but rather from the need to strengthen the US’ autonomy and strategic position.

The new Strategic Project for Economic Recovery and Transformation («PERTE» project) approved by the government in May could provide a boost to the Spanish automotive industry, one of the hardest hit by the current shortage of microchips, which are increasingly necessary for the production of electric vehicles.

We are now almost half way through the year and it is time to take stock in order to update a set of economic scenarios in which the divergence in the pattern of inflation between the United States and Europe has been key to explaining the adjustment of interest rate forecasts.