Big data and the big challenges of the Spanish economy

The speed at which technology is advancing stands in stark contrast to the slow pace with which the major economies are addressing crucial challenges such as climate change, demographic change and social cohesion. For years, we have been discussing the consequences of failing to reduce greenhouse gas emissions and the importance of inclusive economic growth, as well as the implications of population ageing. Although the technological improvements are clear, turning them into concrete actions to address these challenges remains illusive.

At CaixaBank Research, we try to help close this gap. In the following pages of the Monthly Report, you will find several articles analysing the impact of these phenomena on the Spanish economy. The novelty: the use of internal CaixaBank data, duly anonymised. Using big data techniques and advanced statistical tools, we build indicators that enable real-time and detailed analysis of the impact of these phenomena in multiple dimensions.

For instance, one article analyses the impact of the drought on water consumption habits using data on bills paid by direct debit from CaixaBank accounts. Through this analysis, we found that the policies implemented during the drought had a significant impact on water consumption. The declaration of a drought in a given municipality led residents to reduce their water consumption by around 10%.

Another article examines the economic impact of the floods in the province of Valencia. By analysing patterns in spending carried out with CaixaBank cards, we found that the economic impact of the storm in the municipalities that were hardest hit is both significant and persistent, with purchases still down some 60% one month later. The impact is widespread across the various sectors, but it is especially significant in retail. In the rest of the municipalities affected by the floods, although the initial impact was also substantial, the recovery, fortunately, is proving to be quicker. The latest available data already show a more normalised trend in expenditure. The multiple indicators that we have built to closely monitor the evolution of the Valencian economy are updated weekly on our website. We are confident that the more information is available, the better the policies to rebuild the area will be.

Finally, we dedicate the Dossier to analyse one of the main determining factors for the well-being of the population and its cohesion: inequality. For developed countries, we have data up until 2022, and in most of them income inequality is on the rise. However, for Spain we have data up until November 2024 and the message, fortunately, is quite different. At CaixaBank Research, for the past four years we have been analysing trends in millions of payrolls paid into CaixaBank accounts, duly anonymised, as well as unemployment or furlough benefit payments. With all this information, during the pandemic we saw the important role played by public aid in cushioning the rise in inequality. In 2022, we announced that the pre-pandemic levels of inequality had been recovered. We now see that inequality has maintained a downward trend since then, thanks to the good performance of the economy and, in particular, the reduction in the unemployment rate. Today, the income inequality indices developed by CaixaBank Research are well below pre-pandemic levels.

The ageing of the population and demographic trends in general also pose a major challenge. The implications for economic growth, health spending and the sustainability of the pension system will largely depend on how we react. In next month’s Monthly Report, there will be an article analysing how the savings of Spaniards, and of older people in particular, have evolved, using internal CaixaBank data. This allows us to answer questions such as: has the sharp increase in savings in recent years been concentrated among older people? And, if so, what could be the reasons?

At CaixaBank Research, we are not leaders in research into big data or artificial intelligence. However, we do try to keep an eye on the latest developments in this field in order to improve economic analysis, especially in those areas that are key in order for growth to be more dynamic, more inclusive and more sustainable in the long term. We are confident that, with the best possible information, the decision-making of the country’s government agencies and private companies will also continue to improve. In short, dear reader, we hope that all this information is of interest and is useful to you, that it helps you to develop a richer and deeper opinion about the situation in which we find ourselves and that it helps you to make the best possible decisions. One more year, thank you very much for following us and for the trust you place in us. From CaixaBank Research, we wish you a Merry Christmas and a Happy New Year.