There and back again, in October. Although world growth overall is continuing to speed up, October began with doubts regarding the extent of the recovery. The most evident manifestation of these doubts was the notable upswing in volatility experienced by the financial markets in October, resulting in extensive stock market losses during the first two weeks. Investors became cautious given the IMF's moderately alarmist message (although its autumn forecasts were only slightly worse than those from July, the Fund's sombre tone did the trick), as well as somewhat disappointing macroeconomic figures in the euro area and rather unclear communication from central banks. As more positive hard data were announced (particularly Q3's GDP growth figures for the United States and China) and the imminent actions to be taken by the Fed and the Bank of Japan became clear, a large part of this excessive pessimism evaporated, a change reflected by risk assets that clearly recovered the ground they had lost. In short, after an October filled with financial uproar we are almost back to where we started: the engines (United States and China) are still working while Japan and the euro area are temporarily weak. If the forecasts come about, all this should be the precursor to a reasonably positive 2015 at a global level.

The mainstays of the global recovery, United States and China, have had a calming effect. The economic indicators for the United States, especially GDP growth for Q3 (up by 0.9% quarter-on-quarter, similar to Q2), point to the US giant's expansion becoming stronger. This GDP figure, together with the good trend for ISM business activity indicators, the absence of significant inflationary pressures and the continued recovery in the labour market endorse our scenario of growth for 2014 and 2015 (2.2% and 3.1%, respectively). Given this situation, the Fed, as expected, has confirmed that it is ending its asset purchase programme, although it has also insisted that interest rates will remain low for considerable time (probably until mid-2015). In the case of China, its growth figure for Q3 (7.3% year-on-year, higher than the consensus of analysts) has dispelled fears of a hard landing. Moreover the first data published for Q4 suggest that activity is still on course. Unlike these good signs from the United States and China, Japan is sailing in choppier waters. Although the country's current situation is still being distorted by the effect of April's VAT hike, and we should therefore see activity pick up again in Q3, the underlying trend is still not positive. This has forced the Bank of Japan to broaden its asset purchase programme to a degree that has taken both analysts and investors by surprise.

The current situation of the euro area is still weak. The euro area's recovery continues to be characterised by its slow rate and uneven spread. This slowness and geographical disparity, certainly greater than expected months ago, as well as a series of setbacks (Russia, Middle East, irregular international trade, etc.) have fuelled doubts regarding the revival in the countries of the single currency, with some even predicting a third recession. This is an extreme hypothesis we do not share. Data for Q4 point to activity probably having bottomed out in Q3, and this also seems to be the case for inflation which picked up moderately in October. Moreover, if we move away from excessively pessimistic short-term perspectives and focus on the long term, it can be seen that such different economic speeds have been a predominant feature since before the crisis and largely depend on the structural reforms carried out. Two of the countries that will grow the most in 2015 will be Germany (which carried out its reforms at the beginning of the millennium) and Spain (although there is surely still a lot to be done, it is undoubtedly one of the countries that has carried out most reforms since the start of the crisis). On the other hand, it is important to note that the publication of the stress tests on Europe's banks has led to positive results in general terms, which should serve to reduce recurring doubts regarding the overall solvency of Europe's banking system.

Spain's economy is approaching cruising speed. The figures for economic growth confirm that activity is tending to slow down very gradually but it is still notably dynamic compared with the growth seen in its neighbours (up by 0.5% quarter-on-quarter in Q3, just 0.1 pp less than in Q2). Judging by the initial indicators for Q4, this slight moderation will continue in the last few months of 2014. In short, it appears that the Spanish economy, after the upswing in activity in Q2, has reached what might be its cruising speed for the coming quarters. Given this situation of a gradual recovery, one of the most frequently mentioned risks, namely deflation, should progressively vanish. For the time being, growth for inflation in October stood at –0.1%, a figure that, although low, is already 0.1 pp higher than in September.