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The European Parliament elections this June were held at a key moment for the European construction process, taking into account the economic, political and social challenges that our continent must address in the coming years. Many of these challenges are discussed in the Dossier of this Monthly Report, ranging from the loss of competitiveness in a world that is undergoing a reconfiguration of value chains and relationships between economic blocs, to the revitalisation of productivity and technological development, to the need to push ahead with the capital markets union.
With the return from the summer lull in September, markets have once again turned their attention to geopolitical tensions, rising energy prices and a renewed environment of higher interest rates. In this context, we analyse the ECB's path to a new monetary normal, the evolution of US tariff policy, and the unique case of Ireland, where the influence of multinationals complicates the interpretation of some European statistics. Meanwhile, the Spanish economy continues to demonstrate remarkable resilience. In this issue, we also examine how the external sector has consolidated its role as one of the drivers of the post-pandemic expansion and we explore the transformation of Spaniards’ consumption habits.
Analysis of the economic impact of the Ukraine crisis
The Spanish economy continues to advance at a dynamic pace, maintaining relatively high growth both from a historical perspective and in comparison with most developed economies. On the international stage, the economy is showing resilience as the effects of two major opposing forces – geopolitics and artificial intelligence – fully manifest. The optimism surrounding AI in the US stock market and its comparison with the dot-com bubble is one of the topics analysed this month, as well as the reasons why housing is one of the main concerns of European citizens. In Spain, we also address the Treasury’s funding needs and the relationship between company size or job tenure and wage incomes using anonymised internal data.
The dollar remained stable against the euro over the summer despite the conflict in Iran, higher oil prices and a more hawkish Fed, partly thanks to positive surprises on the other side of the Atlantic, including stronger-than-expected GDP growth despite the energy shock. Meanwhile, the US economy remains resilient, although a reacceleration in consumer spending over the coming quarters looks unlikely. Looking ahead, we continue to expect a gradual depreciation of the dollar, supported by the euro area's relative cyclical improvement, with fiscal stimulus yet to be fully deployed, and by an interest-rate path that we expect to be more favourable to the euro than markets currently price in. Added to this are the well-known structural vulnerabilities of the US economy, namely its large fiscal and external deficits, although the dollar's pre-eminent status in the international monetary system remains largely intact.
Beatriz is an economist at the International Economics & Markets Department. She has a degree in Economics from Universidad San Pablo CEU, a postgraduate degree in Market Research and doctorate studies in Applied Economics at Universidad Complutense de Madrid. With 18 years' experience in the financial sector, before joining CaixaBank she worked in sales trading and bond analysis and strategy at Ahorro Corporación. Her main areas of expertise are global financial markets, particularly bonds and equity.