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As is tradition, the November edition of the Monthly Report includes the Dossier in which we analyse the economic outlook for the coming year. On this occasion, we have selected three topics that deserve special attention. Firstly, we look at the outlook for the global economy in 2025, as a year threatened by the division between economic blocs. Secondly, we focus on the easing of monetary policy that lies ahead, now that the disinflation process is on track and economic activity is showing signs of a slowdown. Finally, we analyse the state of the Spanish economy going into 2025, after several quarters with better-than-expected performance in the macroeconomic sphere that have forced us to revise our growth forecasts upwards.

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.

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.

In the May issue of the Monthly Report, we include a special dossier to analyse the present and future of the new AI economy, addressing its macroeconomic, business, financial and geopolitical implications. We begin with an overview of the global deployment of AI from a supply-side perspective, analysing the value chain, the role of infrastructure, energy and semiconductor bottlenecks, and the position of different powers in this technological race. We then examine how AI could drive productivity growth, as well as what we know – and do not know – about its effects on employment, emphasising that the leap from microeconomic improvements to macro impacts will be gradual and uneven across countries and sectors. In Spain, AI adoption by firms is advancing rapidly, but remains limited and uneven, posing significant challenges for productivity and for the cohesion of the economy’s productive base. We also address AI governance strategies in the US, China and the EU, and the balances between innovation, regulation and adoption that will shape AI geopolitics in the coming years. Finally, we cover AI in financial markets, the valuations of big tech firms and the risks associated with high concentration and the growing investment needs in infrastructure.