After almost two years raising interest rates, in 2023 the major central banks reached the peak and adjusted their strategy: instead of raising official rates further, the monetary tightening was going to be implemented by keeping rates at that peak for longer. However, by the autumn the financial markets were already questioning this narrative. Why?

Although it is still far from the 2% target rate, inflation in both the euro area and the US has fallen steadily throughout 2023, and one of the key assumptions in our 2024 outlook is that it will continue to do so next year, facilitating the first interest rate cuts by the Fed and the ECB. But how robust is this disinflationary assumption? How much of a hurry are the central banks in to lower rates?

Emerging countries have experienced a number of crises throughout the various cycles of monetary tightening in the US, enduring a very high economic and financial cost. What will be the consequences of the Fed’s rate hikes for their economies?

Hoy publicamos el número correspondiente a la economía de La Rioja en nuestra la Colección Comunidades Autónomas, serie que tiene como objetivo contribuir al conocimiento de la realidad económico-territorial de las distintas regiones que conforman el conjunto de España, a través de la realización de diagnósticos estratégicos que estudian cada uno de los principales componentes socioeconómicos regionales de forma individualizada.

Despite the reduction of the public deficit to around 2.8% of GDP, the Treasury’s funding needs remain high, with a projected net issuance of 60 billion euros. It will also have to deal with the end of reinvestments by the ECB and the impact of interest rates on public debt.

With the general government deficit expected to stabilise at around 4.0% of GDP in 2023, the Treasury’s funding needs will remain high. The market will also have to absorb all of the debt held by the ECB that will not be reinvested by the central bank, after it announced a shift in its strategy in December. In this context, it is useful to put into perspective the volume of debt that the market will have to absorb during 2023.

We delve into the REPowerEU plan, approved in May by the European Commission, and its measures to accelerate the energy transition envisaged in the Green Deal and the Fit for 55 package.