Publications

Domestic demand remains strong, despite some recent signs of moderation. However, the lagged effects of sharp monetary tightening—now mostly over—along with less expansionary fiscal policy and a less supportive global backdrop are expected to pave the way for a deceleration of both GDP growth and inflation.

GDP is projected to grow by around 2.5% in 2025 and 1.7% in 2026, maintaining a pace close to the medium-term trend despite a slowdown. This deceleration will be largely driven by shifts in U.S. trade policy and the heightened uncertainty they have triggered.

The impact of tariffs is computed through the calculation of effective tariffs under different scenarios and simulations based on distinct methodologies. If the current tariffs remain broadly unchanged, global growth could initially fall between 0.2pp and 0.5pp, and potentially more over the medium term.

Economic activity is deteriorating due to heightened uncertainty; tariffs are affecting an economy already weakened by judicial reform and fiscal consolidation. We forecast GDP to contract by (-)0.4% in 2025, with a recovery expected in 2026 (1.2%).

We raise the China GDP forecast based on the recent China-US Geneva Agreement and the 3nd round stimulus. We also analyze the recent economic development and the policy outlook.

In 1985, Spain joined what was then the European Economic Community. Four decades down the line, the balance is very positive in terms of growth, employment, and well-being, although it also reveals certain outstanding issues that Spain would do well to address.

In May 2025, the CPI fell by 0.06%, mainly due to lower food prices, particularly poultry products, following previous increases. Electricity rates and fuel prices also declined, reflecting lower international oil prices.

The real estate sector regained dynamism in 2024. Sales grew in much of the country, driven by a more favorable economic environment. However, the new supply remained insufficient to meet demand. The performance of the sector will be conditioned by several factors.