We analyse the origin of the government deficit in the United States (at 6.3% of GDP, it is one of the highest among advanced countries), its impact on the American economy and the medium-term outlook for the sustainability of public debt.
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Since the beginning of 2018, the Trump Administration has adopted a more belligerent tone in trade policy: for example, it has increased tariffs on Chinese imports worth 250 billion dollars, it has added Huawei to the list of companies that require government approval to purchase US technology, and it is studying tariffs on auto imports. This can be seen in the following chart.
At CaixaBank Research, we are not leaders in research into big data or artificial intelligence. However, we do try to keep an eye on the latest developments in this field in order to improve economic analysis, especially in those areas that are key in order for growth to be more dynamic, more inclusive and more sustainable in the long term.
To date, Spain has already complied with 70% of the reforms set out in the Plan, but only with 15% of the investments, partly because of the Plan’s very nature, which places more emphasis on the reforms in the first few years, and partly due to some initial delays in the implementation.
Competitiveness is a key factor in a country’s economic prosperity. The ups and downs of the business cycle can influence economic growth to a greater or lesser extent. However, over the long term, the fundamental factor that determines an economy’s ability to generate wealth and prosperity in a global environment is competitiveness.
The evolution of the middle class in Spain reflects a slight upward trend in recent years: according to the data, the percentage of the population belonging to this social stratum increased from 59.2% in 2007 to 61.1% in 2022. However, despite this slight growth, the perception is often the opposite.
The recovery will have to face a new hurdle in the short term. While this should not change its trajectory, it could once again cloud the economic landscape over the coming weeks, at least until we have all the necessary information to refine the health and economic policy responses.
We continue to analyse the phenomenon of de-risking among the major economic powers in a new instalment of articles dedicated to international trade and geopolitics. In this first article, we will focus on the United States and China, and in a second edition, on the European Union.
Between 2013 and 2019, the recovery that followed the financial and sovereign debt crises enabled gradual but sustained improvements in household purchasing power, supported by an improvement in employment and a contained inflation environment. The pandemic disrupted this dynamic, and while nominal income and the labour market showed resilience, the inflation shock exacerbated by the invasion of Ukraine eroded purchasing power and strained households’ well-being, hitting low-income households particularly hard. In this context, real actual individual consumption per capita – a broad indicator of material well-being that includes both private expenditure and individual goods and services provided by the public sector – allows us to analyse how the living conditions of European households have evolved before and after the pandemic, as well as the role of public redistribution.
The string of supply and demand shocks triggered by the announcements of recent weeks will alter the balances of growth and inflation, while the expectations variable will modulate the effects that will be transmitted through the trade and financial channels.
In a context of gradual recovery of the Spanish economy during 2021, the trend in the real estate market has been very encouraging, especially on the demand side.
Immigration plays an essential role in ensuring the sustainability of demographics and employment in an ageing society with a very low birth rate like that of Spain. In this article we analyse the recent evolution of immigration flows into Spain, their geographical distribution and their socio-economic characteristics.
That being the case, for the moment, and while we wait for events to unfold, it seems that our economy ought to weather this period of uncertainty better than our main trading partners.
Although our attention will remain focused for a while on geopolitics and all its derivatives, the elephant in the room remains the medium-term implications of AI on macroeconomic variables. The risk is of being overly optimistic, but the tip of the iceberg of this megatrend is promising, considering the initial positive effects on US growth and on the earnings of firms in the sector.
In 2020, global trade in high-tech goods fell by just 1%. This resilience, combined with the increase registered in 2021, leads us to pose the following question: are we facing a change of trend in the consumption patterns of technological goods or, on the contrary, will the return to «social normality» revive the pre-pandemic patterns?
In 2021, supply problems have dominated the financial headlines. One of the most prominent problems has been the lack of chips, or semiconductors, which has caused many headaches across a range of sectors, including the automotive industry that is so key to European industry. In the face of increased structural demand for technological goods, is the supply ready for it?
The economic impact of the war with Iran is yet to be written. If a deal is reached in the short term and the movement of goods through the Strait of Hormuz resumes relatively quickly, the macroeconomic effect could be limited. Amid the recent emphasis on the downside risks, it is important not to lose sight of this scenario. Not only is it plausible, but it could be the most likely.