Publications

The Spanish economy shows remarkable resilience. Despite inflation and rate hikes, consumption and investment remain robust. The private sector's lower vulnerability and the use of household savings explain this strength.

Keynote Lecture at the Swiss National Bank for the CEPR European Household Finance Annual Conference. This analysis, based on high-frequency data from Spain, challenges the idea that monetary policy has long lags. It shows that consumption and sales react within days or weeks to monetary shocks.

GDP is expected to grow by 2.9% in both 2026 and 2027. Despite the effects that El Niño is already having on growth, private investment and non-extractive sectors will continue to support economic activity. A strong rebound is expected in 2028.

The Spanish economy will maintain solid growth of 2.6% in 2026 and 2.1% in 2027, supported by employment, consumption and services. Higher energy costs, inflation and interest rates will weigh on activity, while structural challenges to growth persist.

Credit growth continues to lose momentum as macroprudential restrictions remain the key sector driver. We continue to expect 2026 ROE at around 25%, with risks tilted to the downside. Further decline in TL funding costs should support margins, although slower loan growth and rising costs may constrain the ROE recovery.

The reassessment of the policy outlook has pushed Treasury yields sharply higher, with the 10-year yield reaching around 5.3% as markets price in resilient growth: the rise in nominal yields has been almost entirely matched by higher real yields.

By a majority, Colombia's central bank increased the interest rate by 25bp to 12.25%. The decision responds to the rebound in annual inflation to 6.2% in August and rising expectations, despite signs of a slowdown in economic activity and a weak labor market.