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We thus find ourselves in a period of extreme fragility in which, more than ever, it seems essential to avoid any misalignment between fiscal policy and monetary policy in order to minimise the risk of financial panic. The fact that the latest incident of this kind took place in the United Kingdom – a country with deeply liquid markets and whose currency still serves as an international benchmark – serves as a stark warning to seafarers that the seas are rough and the skies are clouded.

On balance, all the indicators suggest that growth in the euro area will experience a notable slowdown in Q4 due to the bottlenecks, although for the time being we are confident that the quarter-on-quarter growth rates will still be above their long-term average.

Few economic topics have experienced as many twists and turns in such a short time as the tariff saga of Trump 2.0. In just 18 months, analysts (not to mention firms involved in international trade) have experienced a true roller-coaster: the iconic Liberation Day; the unprecedented escalation with China, with tariffs exceeding 100%; and the Greenland episode, amidst the usual threats to the EU.

Although the exposure of Spanish employment to US demand is limited in aggregate terms, its impact varies considerably from sector to sector. Activities such as manufacturing (especially in pharmaceuticals), air transportation, professional activities and ICT have closer links, together with the sale and repair of vehicles.

The economic recovery in the euro area continued during Q2, but it began to lose momentum in June. The Purchasing Managers’ Index (PMI) for the euro area remained at levels compatible with positive growth in June, but disappointed by falling with respect to the previous month, weighed down by an industrial sector that is slipping deeper into recession.

While economists have been incorporating big data into their analyses for a number of years now, the COVID-19 pandemic has produced a veritable revolution in real-time economics. The latest contribution from the CaixaBank Research team to this revolution is the Real-time economics portal, launched on 8 November 2022.

The slowdown that is beginning to appear in the indicators is incorporated into the new CaixaBank Research forecasts, detailed in the following pages of this Monthly Report. Broadly speaking, the scenario anticipates positive activity growth, albeit more restrained between the second and third quarters of the year. Energy prices are expected to moderate by the end of 2026, according to oil and gas futures markets, which should lead to a slight re-acceleration of growth. 

Despite futures contracts indicating structurally higher oil prices in the coming years as a result of the biggest oil shock in history, markets also seem to be assuming a rapid normalisation of supply and demand conditions in the coming months.

The Spanish labour market has changed its growth pattern since the pandemic, showing an increase in employment in sectors such as health, education and technology. Is this new model favouring an increase in productivity? We analyse the impact of the composition effect and how it compares with other expansive cycles.

The Spanish economy has once again exceeded our expectations in the opening months of 2024. While the GDP growth figure for the final quarter of 2023 was higher than expected, that of the first quarter of this year confirms the good performance of Spain’s economy and leads us to revise our forecasts upwards. Let’s re-examine the main factors that will determine the outlook for Spain’s economy, after incorporating the latest available information.

The movement in the financial markets of recent weeks serves to consolidate the sensation that the interest rate regime will regain a degree of normality in the medium term, following the anomaly in the pattern of monetary policy in much of the last decade. This will mean higher real or equilibrium natural rates of interest than we have had in recent years.

The macroeconomic landscape is once again constrained by a geopolitical conflict. The crisis between the US and Iran, which began over three months ago, remains under a fragile truce. However, the Strait of Hormuz remains closed, which is currently the most damaging factor for the global economy. Spain is facing this episode from a position of strength, but rising energy costs and the deteriorating international environment will reduce economic dynamism and increase inflation. Therefore, we have revised our GDP growth forecast to 2.1% for 2026 and to 1.8% for 2027, compared to 2.4% and 2.0% previously. This is a moderate revision and it does not change the diagnosis of a dynamically growing economy.

Although it is still very difficult to quantify the impact of the escalation of the war in Gaza on the world economy, what is clear is that one of the main focuses of attention falls on the oil market. So far, the financial markets have reacted relatively cautiously, although volatility has increased. In the crude oil market, there has been some upward pressure on prices.

While the development of artificial intelligence dates back to the 1950s-60s, advances in the past decade have driven more recent developments in so-called generative AI, capable of producing text, code and audiovisual material based on patterns learned from large datasets. The deployment of AI can be divided into four key phases: innovation, development of new infrastructure, diffusion and widespread adoption of the new technology, and adaptation of business models and markets to the new technology.