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Just over a month since the start of the war in Iran, uncertainty continues to dominate any assessment of the economic outlook. However, it is necessary to evaluate the impact of this new crisis, a matter to which we dedicate a large part of the articles in the April issue of the Monthly Report. Starting with a map of geoeconomic exposure and strategic relevance of the Middle East, we analyse the situation in the oil market and the energy position in Europe and Spain, and examine the main channels through which it could impact the economy: inflation, trade and finance. On the other hand, we assess the progress with the European Competitiveness Compass and the implementation of the NGEU funds in Spain, and we estimate how the interest rate hikes and cuts between 2022 and 2025 have affected Spaniards’ consumption, based on high-frequency data.

Analysis of the economic impact of the Ucraine crisis in Spain

We begin the year by addressing one of the major challenges of the European and Spanish economies in a new Dossier: «An analysis of European productivity». In it, we explore the recent dynamics in productivity within the European Union, focusing on its territorial dispersion and the differentiating factors between the best and worst performing regions. After providing some initial context by outlining the main trends, we distinguish the different groups of European regions according to their productivity level and analyse the key economic factors that drive it. Finally, we identify the factors that hinder productivity growth in the Spanish economy, and those that could drive it, focusing on the evolution of productivity in the various autonomous community regions and on their defining traits, and we compare them with other European regions.

The outbreak of the war in Iran represents a new twist in the geopolitical landscape that will once again test the resilience of the business cycle, amid a spike in energy prices and uncertainty in the short term. Once again, it is time to reassess where the economy stands and analyse its strengths and vulnerabilities in relation to the channels through which this new shock could spread, a task to which we dedicate much of the articles in this Monthly Report. Additionally, in this issue we analyse the challenges faced by Spanish exports in terms of competitiveness; the recent ruling by the United States Supreme Court on the country’s tariff policy and its potential effects on international trade, and the rise in sovereign rates in Japan and its consequences for the country’s economy.