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There is cause for alert... and concern. The trickle of negative news has been constant in recent months. If you have read the newspaper over the holidays, you will hardly have found a section that left you indifferent. Migration and humanitarian crises, political and social conflicts, and turbulence in the financial markets have occupied all the headlines. In this context, it seems that the economy should be weakening significantly.

The Spanish economy performed better than expected in the first half of the year, but a slight moderation is anticipated in the second half.

In 2024, Spain reduced its exports to the European Union and the United States, so it had to seek out opportunities in new markets in order to diversify and strengthen its trade relations. These new markets primarily included countries in ASEAN, Latin America and the Caribbean Islands, as well as Oceania.

At least for now, and despite the depreciation it has accumulated so far this year, the value of the dollar does not appear to reflect any major change in the currency’s central role in the international monetary system.

With this Monthly Report (MR) we celebrate 500 issues since the publication’s birth in January 1980. It has been 45 years and five months, with 11 issues published each year (we only take a break in August) and with the same goal since the beginning: to offer the reader a view of the current economic situation, both in relation to the latest developments and underlying structural issues.

The government has presented its 2025 Annual Progress Report, which anticipates an improvement in the general government balance thanks to sustained economic growth, the end of the temporary tax cuts and the containment of expenditure. 

This month, we have updated our forecast scenario for the Spanish economy. Although we now expect growth to be slightly lower than previously anticipated, the message remains broadly positive and there are several elements sustaining the Spanish economy’s dynamic growth.

The truce in the tariff tensions between Washington and Beijing ended up fuelling a renewed risk appetite in May. However, the optimism was gradually overshadowed as the month progressed by the predictable fiscal deterioration in the US and other developed economies, as well as by the persistent volatility in Trump’s trade policy.

In this article, we analyse the consequences of the current energy crisis for electricity prices and shed some light on how it will effect electricity bills in Spain. 

The key for the coming months will be to reach the turning point in the pattern of inflation, at which point an end will be in sight for the most aggressive cycle of interest rate hikes in the last 40 years, and this in turn ought to reduce volatility in the financial markets.

The ECB has completed a monetary cycle, leaving the negative rates and unconventional measures of the last decade behind and significantly tightening monetary policy. During this cycle, the ECB has also adjusted the structure it uses to guide and implement monetary policy

The current demographic transition should lead, ceteris paribus, to a significant slowdown in economic growth over the coming decades, in both advanced and emerging and developing countries. Only an ambitious implementation of a set of policies can significantly cushion its effects. 

In the other pages of this Dossier, we have analysed in depth how ageing will affect the capacity for economic growth and the public finances. All these changes will have consequences on the supply and demand for savings and, therefore, on the interest rates of economies.

Prolonging working life, boosting productivity and attracting more immigration are three of the levers proposed by economists to mitigate the impact of ageing on public finances in general and, in particular, on pension spending.

Undoubtedly, the negotiation of the next budget will once again test the health of the European project, on which our strategic autonomy needed to address the geopolitical challenges that will continue to come from abroad will depend.

We are witnessing the first strikes of the transformation process in which the world economy is currently immersed and which will test everything from trade relations between the major economic blocs to the solidity of the institutions that have generated well-being in recent decades.

For much of April, the tone in the financial markets was marked by geopolitical risks and investors’ bets about the near future of monetary policy in the major developed economies.

GDP provides a positive surprise in Q1, with quarter-on-quarter growth of 0.7%, according to the first provisional estimate published by the country’s National Statistics Institute.This exceeds our forecast of 0.4% and, therefore, introduces upward risks to our forecast for the year as a whole, which until now has stood at 1.6%.

As the global economy’s landing is turning out to be smoother than anticipated a few months ago, the last few weeks reminded us that the environment continues to be marked by a high degree of uncertainty.

One year after the floods, the data show a widespread recovery, albeit uneven between municipalities, businesses and socio-economic profiles.