Macroeconomic Analysis

Headline inflation remained at 3.2% year-on-year, mainly due to the deceleration of energy and food prices. However, core inflation ticked up to 3.0%. BBVA Research estimates that headline inflation could increase to 3.6% or 3.7% in June.

El Niño is a recurring Pacific Ocean warming event that affects Latin American countries in very different ways. Its economic impact depends on each country's exposure and vulnerability, influencing growth, inflation, agriculture and infrastructure through diverse climate transmission channels.

The CBRT kept rates unchanged and signaled a further reliance on macroprudential measures. Despite some moderation in demand conditions and favorable seasonal factors on inflation, domestic and external uncertainties continue to pose challenges to the disinflation process.

Chinese economy is domestic driven and Iran war’ impact on China’s economic growth and inflation has been limited compared with other Asian economies.

Consumer inflation materialized at 1.7% m/m, in line with our expectation, bringing annual inflation to 32.6%. Assuming a gradual reopening of Strait of Hormuz and some normalization in energy prices in 2H26, we maintain our year-end CPI forecast at 30%, while acknowledging upside risks amid war-related uncertainty

The national unemployment rate remained at 8.8% in April 2026, interrupting the downward trend observed since 2025. This result responded to proportional increases in both the employment rate and the overall participation rate. Thus, job creation continued to be dynamic, with an annual growth of 3.0%.

Spain’s labour market remains dynamic, supported by the foreign population, which helps offset demographic ageing. Immigration is key to sustaining employment, though integration faces temporary employment and productivity challenges. The regularisation process is expected to have a limited macroeconomic impact.