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One of the imbalances that has traditionally characterised the Spanish economy is its high levels of foreign debt, which is a source of vulnerability in the event of possible shocks in the financial markets and also jeopardises the sustainability of expansionary cycles.

In the current context of uncertainty, one of the most encouraging aspects of the Spanish economy is the strong performance of the labour market. Despite some loss of momentum in recent months, job creation continues apace, with permanent hiring making particularly strong inroads, and this in turn is helping to bring down unemployment and temporary employment.

Gross disposable income is growing well above household spending in Spain, with the consequent improvement in household finances. We explain this increase and explore where the savings are being allocated.

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 March, the bombings exchanged between Iran and the US and Israel caused significant stress in energy commodities; Brent crude oil fluctuated around 100 dollars per barrel throughout the month, while TTF gas did so between 50 and 60 euros per MWh. This points to a rebound of inflation and has led the markets to price in rate hikes at the ECB’s forthcoming meetings.

Despite the efforts made in recent years to reduce energy intensity in Europe and boost the role of renewables as alternative energy sources, the region remains sensitive to shifts in international energy prices. The current situation represents a new challenge, but also a new opportunity to accelerate the transition towards a sustainable and secure energy model.

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.

The balance of the European Competitiveness Compass in 2026 is positive in terms of orientation and debate, but limited in progress, with key decisions still pending and with an uncertain future in a more complex geopolitical environment.

Now, although the ECB has tightened the conditions required for an interest rate hike, there are more factors to support the idea that medium-term inflation could lie at 2%, and after more than a decade without doing so the ECB may finally raise interest rates.

In this article, we analyse the factors behind the recent evolution of Spain’s household savings rate and the outlook for 2026, in a context marked by the conflict in the Middle East, which could lead to higher inflation and potential interest rate hikes.

The beginning of a new economic chapter is marked by the sensation that we may be approaching a turning point in the behaviour of the economy.

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 Draghi report lays the foundations for re-industrialisation in Europe, combining sweeping actions with a menu of specific proposals for 10 strategic sectors.

The tailwinds generated by the latest inflation data and strong labour markets coexist with a natural loss of cyclical momentum and, in particular, with an environment marked by high geopolitical risks. This combination of competing forces will determine the pace of growth over the coming quarters.

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.

In April, the Portuguese government presented its Draft General Government Budget for 2022, following the formation of the new government after the early elections held in January, in which the Socialist Party obtained an absolute majority in parliament.

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.

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

The relative improvement in international prices of agricultural goods has barely been reflected in global consumer prices. The main reason for this is the depreciation of many countries’ currencies against the dollar, which intensified with the Fed’s first interest rate hike.

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.