Publications

This paper presents a methodological framework to quantify the economic impact of natural disasters. It estimates a damage function and measures employment effects using a dynamic spatial model. The 2024 DANA in Valencia validates the approach and highlights the importance of both location and compensation mechanisms.

The fiscal deficit is expected to decline to 2.7% of GDP in 2025 and 2.5% in 2026. This outlook reflects a gradual and sustained adjustment in public finances, supported by solid economic growth. The consolidation occurs amid upward pressures on public spending, due to rising pension costs and increased defence expenditure.

This note proposes a framework to estimate the employment effects of floods in Spain, combining imputed damage data with a spatial panel model. These extreme events cause job losses and regional spillovers, but timely aid mitigates them. The DANA in Valencia illustrates the frameworks' accuracy and its policy relevance.

The deficit is estimated to have stood at 3.3% of GDP at the end of 2024, and is projected to decline to 2.7% in 2025 and 2.4% in 2026. Compliance with fiscal rules would entail a slightly tighter fiscal stance over the 2025–2026 period.

In 2024, the Spanish economy showed positive dynamics driven by domestic consumption and tourism, which also introduced heterogeneity in regional developments. As a result, Mediterranean regions and the islands were generally the ones leading growth once again last year.

Fiscal consolidation is expected to accelerate in the final quarter of the year, bringing the public deficit closer to 3.0% of GDP. Fiscal adjustment in 2025 and 2026 will depend on the implementation of the new fiscal rules and the effectiveness of tax measures.

GDP growth in 2024 has been revised upward by 0.2 percentage points, reaching 3.1%, driven by stronger-than-expected performance in the third quarter and a slight acceleration in job creation in the fourth. Growth is projected at 2.3% in 2025 and could settle at 1.7% in 2026.