Enric is Head of Strategic Planning and Research and Chief Economist at CaixaBank. First degree from Universitat Pompeu Fabra, Master and Doctorate in Economics from the University of Chicago and a graduate of the Program for Management Development at IESE Business School. After earning his Doctorate, he worked for six years at the International Monetary Fund, monitoring various emerging economies and designing and negotiating a range of financial assistance programmes. He joined CaixaBank in 2006 and, since 2016, has led the Strategic Planning and Research team. He sits on the Executive Committee of the boards of FEDEA (Foundation for Applied Economic Studies), the Real Instituto Elcano, the Institut d'Economia de Barcelona (IEB) and the Institute of Political Economy and Governance (IPEG), as well as being a member of the Editorial Board of the Revista Econòmica de Catalunya, published by the College of Economists of Catalonia, and of the Expert Group for PwC's Consenso Económico.
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The initiation of the ECB’s monetary policy normalisation process has led to an acceleration in house prices, especially in markets with a significant mismatch between insufficient supply and dynamic demand. The economies in which real prices have increased the most in the last year and a half, and where the residential markets are showing signs of more significant overvaluation, include Portugal, Bulgaria, Hungary, the Netherlands and Estonia. In contrast, the markets of large economies such as Germany, Sweden, France and Luxembourg remain overvalued, but have corrected the strong price growth they experienced in the decades leading up to the pandemic, reducing signs of overheating.
The tourism sector once again breaks records and consolidates its role as a driver of growth
In 2024, tourism GDP experienced another year of significant growth, with an estimated increase of 6% in real terms, roughly doubling that of the economy as a whole. This performance was driven by a sharp rise in the number of foreign tourists and their average spending, thanks to a recovery of British and long-haul tourism. On the other hand, Spanish tourists are now travelling abroad again, resuming pre-pandemic levels. In this favourable context, the hotel sector continues to enjoy very strong demand, which has allowed it to continue to raise its occupancy levels and its profitability to new highs. Looking ahead in 2025, Spain’s tourism sector will grow at a slightly more moderate rate, although it still has significant support factors to continue expanding and we expect it to remain one of the main growth drivers of the economy as a whole.
Our Sectoral Indicator reflects a widespread improvement across the various sectors in 2024, particularly in some branches of manufacturing, such as the chemicals, pharmaceutical and paper industries, which have benefited from lower energy costs and an improvement in exports. By contrast, the automotive sector has slowed sharply over the course of this year, following the recovery experienced in 2023.
The combination of restrictions on the use of temporary contracts, coupled with the push for the use of permanent discontinuous contracts to channel work that is intermittent but recurring, has contributed to the reduction in the temporary employment rate, one of the main handicaps of Spain’s labour market and addressing it was one of the objectives pursued by the last labour reform.
Growth in the number of international tourists was contained in 2019 due to the global economic situation and the recovery of rival markets in the Mediterranean. However, the tourism sector looks resilient, supported by the consumption of domestic tourism and the drive towards higher quality tourism.
Valuations of commercial real estate assets recovered significantly during 2024, driven by the shift in monetary policy and the reduction of market interest rates. Investment in the sector grew at an annual rate of around 20% and the living, hotel and retail segments were particularly dynamic. For 2025, it appears that most of the revaluations will have already taken place, as interest rates are already at levels close to the new equilibrium. Still, the sector will continue to attract investment opportunities. Spain is positioning itself among the most attractive destinations for international investment in commercial real estate, thanks to solid macroeconomic fundamentals that will remain attractive throughout this year.
According to the new CaixaBank Research Sectoral Indicator, the most energy-intensive branches of the manufacturing industry and the agrifood sector are the ones which suffered the most in 2023. At the other end of the spectrum we find sectors such as hotels and restaurants and the automotive industry, which performed rather well.
The Spanish agrifood sector has begun to recover after two years of decline, thanks to the moderation of production costs and the easing of the drought. However, the effects of both of these shocks still persist and the sector continues to face major challenges that are limiting its structural growth capacity.
The rental housing market has attracted a lot of attention in recent years. Its sharp price rises, much bigger than the increase in wage income, has highlighted the economic vulnerability of households living in rented accommodation. These households tend to have a lower-than-average income level and a high percentage of them spend more than 40% of their income on housing-related payments. To redress this worrying situation, much-needed economic policy measures have been taken to increase the supply of affordable housing. However, other types of policies have also been proposed, such as rent caps in stressed market areas, although their effectiveness is limited judging by experiences in other countries.
The automotive industry is an important driver of growth and prosperity worldwide due to its contribution (i) in social terms, by facilitating people’s mobility in an efficient, safe and affordable way, and (ii) in economic terms, as a driver of innovation, a generator of good quality jobs and a pillar of international trade. In the case of Spain, it has become a mainstay of our industry and a benchmark on a global scale, thanks to a large production capacity and high productivity resulting from a skilled workforce and a great degree of plant automation. The economic crisis caused by the pandemic has taken its toll on a sector that is in the midst of a technological transformation towards electrification. A necessary transition that will be strongly supported by the Next Generation EU (NGEU) funds.
The Spanish real estate market accelerated in 2024, especially in the second half of the year, largely thanks to the fall in interest rates. This was added to a series of factors that are keeping housing demand very dynamic, including significant migration flows, rapid job creation and strong foreign demand. On the other hand, the supply of new housing is beginning to awaken, but it remains insufficient to address the high demand. This mismatch between strong demand and scarce supply is driving up house prices – a trend that we expect to continue in 2025.
Mireia is an analyst in the Strategic Planning and Research Department at CaixaBank. She holds a degree in Business Administration and Management and a Master's degree in Business Administration from ESADE. Before joining CaixaBank, she worked as a project manager in the Corporate Development and M&A Department at Naturgy, in PwC Corporate Finance and for DC Advisory Partners. Her areas of research and specialisation primarily include the analysis of the profitability and competitive environment of the Spanish and Portuguese banking system.
Sandra is the Director of the Banking Strategy Department. With a Doctorate in Economics and a Masters in Economics, Mathematics and Econometrics from the Toulouse School of Economics, at CaixaBank she has also worked in the Department of Innovation and Digital Transformation. Before joining the bank she worked at Endesa and in the Economics department of IESE Business School. Her main areas of study are the Spanish and international banking systems, financial regulation and the impact of digitisation and new technologies on the competitive environment for banks.
The problem of housing affordability, both rental and ownership, has worsened in recent years and is particularly affecting certain groups such as young people. Solving this issue is no easy task and requires action to be taken on multiple fronts and over an extended time horizon. Public-private collaboration is essential for boosting the supply of affordable housing, and industrialised construction shows promise as a new way to help overcome the major challenges that the sector is facing, such as attracting skilled and female labour, while promoting more digital and sustainable construction methods.
In the course of 2021 we have seen that, in the wake of the pandemic, a misalignment has emerged in the real estate sector between a demand that has recovered very quickly and a supply that is more dependent on structural factors and therefore continues to lag behind. As a result of this misalignment, house prices have started an upward trend which may continue to some extent in the coming quarters as a result of higher production costs in the sector and problems with the supply of certain raw materials. Nevertheless, in the medium term, as new supply enters the market and tensions in global supply chains ease, prices should return to a growth rate that is more in line with the trend in household income.
The movement in the financial markets of recent weeks serves to consolidate the sensation that the interest rate regime will regain a degree of normality in the medium term, following the anomaly in the pattern of monetary policy in much of the last decade. This will mean higher real or equilibrium natural rates of interest than we have had in recent years.
The US interest rates have risen steadily and significantly, galvanised by the Federal Reserve’s rapid and aggressive monetary tightening policies. However, this does not necessarily mean that US bonds are more attractive than their European counterparts. A key factor in the comparison is the exchange rate.
The neutral interest rate is a key indicator for the orientation of monetary policy, the evolution of the financial markets and, in general, the formation of economic agents’ expectations. We delve into its definition and the level at which it stands today.