BBVA Research

The economy continues to perform well. Domestic demand accelerated in the third quarter, driven by private spending. This positive momentum and pension funds withdrawals point to output growth reaching 3,3 % in 2025. A slight moderation is expected in 2026 amid electoral uncertainty, GDP growth easing to 3,1 %.

Between 2025 and 2027, GDP will be driven by domestic demand: resilient household consumption, supportive public spending and investment boosted by a healthier construction sector. Persistently high inflation, cautious monetary policy and a wide fiscal deficit weigh on the outlook.

Domestic headwinds including housing market crash, overcapacity, weak sentiments take the place of tariff war to be the dominant factors for China’s growth slowdown.

In this edition of the QLMO, we examine labour market developments using the information available up to Q3 2025. We review the main aggregate indicators and analyse the challenge of generational replacement.

Revenues from the EU Emissions Trading System (EU ETS) are a fiscal resource available for climate action and the energy transition. By allocating 25% of the expected 2030 revenues to cleantech (€1.1–2.4 billion) and attracting private investment, Spain would strengthen its industrial capacity and competitiveness.

In 2025, the automotive sector is accelerating its sales momentum, with strong growth in utility vehicles and in hybrid and electric models. Greater household purchasing power and a more appreciated exchange rate, among other supportive factors, sustain this trend and will keep driving sales in 2025 and 2026.

Financing in Mexico has been characterized by three main trends: i) the increase in resources allocated to companies; ii) the fade out of the accounting effect of the exchange rate on the balances of loan and deposit portfolios; and iii) the strengthening of retirement funds as the main source of domestic savings.

The total FX position of the economy continued to improve in 3Q25 (with the latest data of Aug25) due to an improvement in public sector’s FX position, led by the CBRT. The composition of external debt continues to shift between the public sector and the real sector.