MacroInsights #10

Macro analysis in partnership with EY Insights.

The RealTimeTracker, our real-time tracking and forecasting model, estimates that GDP quarterly growth will be at +0.6% in Q4 2024, showing moderation compared to previous quarters.

Service indicators drove this GDP growth in the quarter, while investment in capital goods and construction contributed less. Despite this moderation, we anticipate growth of +3.1% in 2024. This dynamism in the Spanish economy has significantly outpaced early-year forecasts. Very preliminarily, we project more moderate rates for next year, slightly above 2% according to the IMF.

*It should be noted that these estimates still do not take into account the effects of the recent DANA storm, which we anticipate to be significant.

In the risk matrix surrounding these forecasts, the following stand out:

• Geopolitical and financial valuation risks remain high, but lower inflation and economic cooling are stabilizing the overall outlook. Public debt and financial intermediation are stable; finances for companies and households are improving.
• Despite current stability, high debt and non-banking leverage create risks in the face of potential shocks in an uncertain geopolitical context.

On the positive side:

• The moderate upturn in growth in the Eurozone: up to 0.4% in Q3 2024, led by Ireland, Spain, and France, although slow growth is anticipated with fiscal and industrial restructuring challenges.
• Inflation near 2% has allowed the ECB to cut rates, with a further reduction possible in December.