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Five months after the last update to our macroeconomic forecast scenario, we have incorporated newly available information and re-examined the main factors dominating the outlook for Spain’s economy.

The CaixaBank Research real estate clock shows the evolution of home prices and sales in Spain throughout the cycle. In 2024, the «clock» will remain in the slowdown quadrant, before giving way to 2025, when we expect the housing market to return to expansive territory.

Despite the encouraging signs of recent months, the international economy will continue to operate in an unstable equilibrium within the forecast horizon.

Between the end of September and the end of February, the US dollar depreciated by 6% in effective nominal terms and by 10% against the euro, trading at close to 1.07, a level not seen for almost a year. We explore what lies behind this change of trend and whether it is likely to continue.

The strong start to the year introduces some upward bias into the growth forecasts for 2023. Nevertheless, the risk that the second half of the year could be weaker, as the aggressive rate hikes are finally transmitted to the economy, may limit the growth expected for 2024.

In 2021, inflation has reached levels not seen for many years in most economies. This phenomenon is dominating the current economic debate, mainly because of its implications for monetary policy. Our view, which is shared by the major central banks, is that the factors behind these high inflation rates are transitory in nature and should fade during the course of 2022.

The economic recovery is expected to be consolidated in 2022, with GDP growth accelerating to around 6.0%. The pandemic could still generate new waves, either through the emergence of new, more contagious variants or due to the arrival of the cold, but we expect that their impact on the health system would be limited thanks to the progress made with the vaccines and that reimposing severe restrictions on activity would not be necessary.

Following a record-breaking 2022, the ECB’s interest rate hikes, coupled with the slower growth in real household disposable income, are expected to weaken the demand for housing.

Wage incomes per employee increased by an average of 2.4% year-on-year in May according to our wages indicator. Are low-income workers’ wages growing at the same rate as those of high-income workers?

It has been almost four months since our last update to the macroeconomic scenario. During these months, the Spanish economy has shown a more resilient tone than expected. Furthermore, the normalisation of gas prices, although incomplete, has been confirmed and the peak in reference interest rates is now in sight. Faced with all these changes, we have updated our macro forecast scenario.

Debates about inequality often focus on dispersion in wage levels and omit one very important aspect: inequality in wage income also depends on the «intensity» of employment, that is, on whether people are working at all and, if so, how frequently. Spain is a prime example, with a high rate of temporary employment (25.1% in Q2 2021) and a proliferation of ever-shorter labour contracts which has a marked impact on inequality.

On balance, all the indicators suggest that growth in the euro area will experience a notable slowdown in Q4 due to the bottlenecks, although for the time being we are confident that the quarter-on-quarter growth rates will still be above their long-term average.

The Spanish government has presented to parliament the Draft General State Budgets for 2022 and has sent to Brussels its Budget Plan showing a picture of the consolidated general government accounts. What lies behind these figures? In which categories will the deficit reduction be concentrated?

To date, the investments already approved as part of the Portuguese Recovery and Resilience Plan (RRP) amount to 12,249 million euros, compared to total planned investments of 16,644 million euros. This represents an approval rate of 74%, which in principle looks promising in terms of getting the most out of the NGEU funds that Portugal will receive up until 2026.

The economic crisis generated by the COVID-19 pandemic is deep, that much is well known, but its impact is also proving to be very different from region to region. This also makes the pressure on inequality highly varied. There are several factors that can explain the large regional differences, such as the strictness of the measures imposed in each area or the differing production structures.

The health situation and the lockdowns made 2020 an annus horribilis for Portugal's tourism sector: total profits generated by tourist accommodation establishments fell by almost 3 billion euros and the total number of guests fell by 61%.