The outbreak of the pandemic in early 2020 has had unprecedented repercussions in many areas of the economy. One of these has been household consumption, the main component of GDP and traditionally considered an indicator of the health of the economy and the well-being of society. Because of the restrictions on business and mobility during the health crisis caused by COVID-19, the drop in consumption was much greater than during previous crises. The positive side is that once restrictions were lifted, Spain’s consumption has rebounded more sharply in 2021 than in the past. In fact, in October the consumption tracker produced by CaixaBank Research using internal data was already 13% higher than in the same month of 2019.
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Using anonymised and aggregated data from card payments made via CaixaBank point of sale terminals, we analysed whether there were any changes in tourist spending and found that the hottest areas of the country experienced slower growth in tourist expenditure between the high seasons of 2019 and 2023. We also found changes as well as changes in the pattern of expenditure during heat waves.
Is the Trump administration’s strategic shift compatible with the United States’ role as a guarantor of the international economic equilibrium?
Risk appetite recovers, following the spike in volatility at the beginning of April. However, the divergence between the central banks’ strategies is accentuated. Meanwhile, sovereign yields return, broadly speaking, to the levels of March and the stock markets recover some of the lost ground. Although the dollar is stabilising, it remains weak, and energy prices suffer due to the global uncertainty.
In mid-2020 the Chinese government announced a series of strict rules on access to credit in the real estate sector, which had historically followed a growth model based on high leverage. However, these measures not only managed to limit debt in the sector, but also exposed its vulnerabilities. In this article, we look at the biggest risks of this strategy.
The 12-month Euribor has rallied from –0.50% at the end of 2021 to over 1.0% in the second half of June, its highest level since early 2014. Why has it increased and what impact does this have on the economy? What can we expect over the coming months?
Although the savings rate in the US today is well below pre-pandemic levels, the savings accumulated during 2020 and 2021 due to the mobility restrictions and fiscal stimulus measures could continue to favour consumption in the remainder of 2022 and in 2023.
The new Strategic Project for Economic Recovery and Transformation («PERTE» project) approved by the government in May could provide a boost to the Spanish automotive industry, one of the hardest hit by the current shortage of microchips, which are increasingly necessary for the production of electric vehicles.
Wage incomes per employee increased by an average of 2.4% year-on-year in May according to our wages indicator. Are low-income workers’ wages growing at the same rate as those of high-income workers?
We analyse the European manufacturing industry’s import dependency on China and the United States and strategies to reduce it in a more fragmented geopolitical context.
During the years of expansionary monetary policy, the Federal Reserve embarked on an asset purchase programme aimed at injecting liquidity into the economy and stimulating it, with its assets peaking at 35% of US GDP in mid-2022. The inflationary crisis required a restrictive monetary policy which included reducing the size of the central bank’s balance sheet in order to withdraw liquidity from the financial system. In 2025, the Fed announced a slowdown in the pace of its balance sheet reduction process beginning in April.
At least for now, and despite the depreciation it has accumulated so far this year, the value of the dollar does not appear to reflect any major change in the currency’s central role in the international monetary system.
The figures for US GDP in Q1 reveal a contrast between the strength of domestic demand and trade flows that were anticipating the introduction of tariffs, while the euro area has shown accelerated growth. However, this boost could soon run out of steam: the tariffs and their consequences will begin to have a negative impact. For now, there are no clear signs of a slowdown in trade flows, but with uncertainty at peak levels, the global economy is expected to enter into a slowdown, with more risks to the downside and more questions than answers.
With this Monthly Report (MR) we celebrate 500 issues since the publication’s birth in January 1980. It has been 45 years and five months, with 11 issues published each year (we only take a break in August) and with the same goal since the beginning: to offer the reader a view of the current economic situation, both in relation to the latest developments and underlying structural issues.
Following a record-breaking 2022, the ECB’s interest rate hikes, coupled with the slower growth in real household disposable income, are expected to weaken the demand for housing.
In these first few months of the year, Spain’s GDP has continued to grow at a significant rate, although the gap between the services and industrial sectors persists. Job creation is gaining traction, while inflation continues to decline, driven by the fall in energy prices. The trade deficit continued to increase in February and residential activity in Spain has had the best start to the year since 2007.
The strong start to the year introduces some upward bias into the growth forecasts for 2023. Nevertheless, the risk that the second half of the year could be weaker, as the aggressive rate hikes are finally transmitted to the economy, may limit the growth expected for 2024.
The financial markets broadly stabilised during the month of April, as investors' radar moved away from the financial turmoil of March to focus on the growth and inflation outlook, with the publication of GDP data for Q1 2023 and the corporate earnings season.
To date, the investments already approved as part of the Portuguese Recovery and Resilience Plan (RRP) amount to 12,249 million euros, compared to total planned investments of 16,644 million euros. This represents an approval rate of 74%, which in principle looks promising in terms of getting the most out of the NGEU funds that Portugal will receive up until 2026.