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We are living increasingly longer and healthier lives – excellent news for all of us. However, this longevity, combined with a persistently low birth rate, is reconfiguring the demographic structure of our societies. In our latest Dossier, we analyse this important demographic shift, as well as its impact on growth, public finances, and savings and interest rates. We also analyse in depth other topical issues, such as the adjustment of the ECB’s monetary policy strategy and operational framework, the European Union’s 2025-2028 budget and the feasibility of it increasing defence spending to 5% of GDP. In the sphere of the Spanish economy, we lay out the causes of departures from employment and the evolution of the incomes of the middle class in recent years.

In the first issue of 2025, we stop to take a snapshot of foreign demand for housing, international business tourism and the savings of Spanish households according to their demographic and income profile. We continue to analyse the European economy’s exposure to US tariff hikes, this time from the perspective of value chains, and we also assess the challenges for European fiscal policy following the entry into force of the new economic governance framework.

October is the month in which we present the update of our economic forecast scenario. Broadly speaking, the world economy is moving at a higher cruising speed than had been anticipated at the beginning of the year, and the buoyancy of the Spanish economy leads us to revise our growth forecast for 2025 upwards. In addition, in this issue we analyse how Trump 2.0 policies could favour investment flows into the euro area, as well as the relationship between firm size and productivity gaps in the European Union. We also review the recovery of Europe’s tourism sector following the pandemic, we take stock of the summer season for Spain’s tourism sector and we identify which autonomous communities could be the most affected by the US tariff hikes.

In this summer edition of the Monthly Report, we continue to focus on how the agreement between the US and Iran is reshaping the global economic outlook, although its fragile nature keeps uncertainty high. In the international arena, we analyse Kevin Warsh's appointment as Chair of the Federal Reserve and how European inflation has responded to the energy shock, with a clear direct impact but still contained indirect effects. We also examine the reform and investment needs identified in the European Semester in light of the end of the NGEU funds. In Spain, where the economy still has strengths to continue growing at a dynamic pace, we take a closer look at the unemployment rate, and we use high-frequency data to examine dining consumption habits and the effects of climate change on the loyalty of international tourists.