Margarita Delgado: Outlook for the Spanish economy and Next Generation EU (NGEU) funds

Speech by Ms Margarita Delgado, Deputy Governor of the Bank of Spain, at the Association for the Advancement of Management (APD), Madrid, 25 April 2024. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and gentlemen:

My thanks to the Association for the Advancement of Management for their invitation. I would like to take this opportunity to set out the Banco de España's view on the outlook for the Spanish economy.

To do so, I will begin by outlining the international setting, where recent developments have been marked by three major trends.

First, despite the restrictive monetary policy stance and geopolitical uncertainty, global economic activity held up better than anticipated in 2023. Thus, according to the latest IMF forecasts, global growth slowed less than expected in 2023, declining to 3.2%, where it looks set to remain for the next two years. Nonetheless, there is significant disparity across geographic areas. For instance, the upward revision to GDP growth in the United States and China stands in contrast to the deceleration seen in the euro area, where growth continues to look decidedly weak.

Second, also worth noting is the continuation of the disinflation process worldwide, as the supply shocks of preceding years have gradually faded, although underlying inflation still looks to be somewhat stubborn in certain regions, such as the United States. The cumulative tightening of monetary policy also appears to have played a key role in keeping inflationary pressures in check.

Third, the global financial markets have been very lively in recent months, with gains in stock prices and rising long-term yields. At the same time, the central banks of the main advanced economies (including the European Central Bank) are expected to cut their policy rates before long, although in the case of the US Federal Reserve the dates envisaged for rate cuts have recently been put back.