International economy

From this page you can access thematically grouped Analytical Articles published in the Economic Bulletin from 1999, ordered by date of dissemination within each year.

All documents are available in PDF format PDF File. Opens in a new window

  • 27/10/2021
    Report on the Latin American Economy. Second half of 2021. Outlook, vulnerabilities and policy space (3 MB) International Economics and Euro Area Department

    The economic recovery in Latin America appears to have firmed in the second half of the year, having come to a halt in practically all the countries in Q2 owing to the unfavourable course of the pandemic. This has led in recent months to an across-the-board upward revision in growth forecasts in the region for 2021. Against this background, the region’s banking systems remain healthy, although some indicators, such as non-performing loans, are beginning to be impacted by the persistence of the crisis. There has also been a notable slowdown in lending, linked partly to the generalised withdrawal of support programmes. The path of the recovery, which is uneven from country to country, will be determined by the pandemic being overcome. It is expected that the recovery will continue to be underpinned by the strength of external demand and commodities prices, by the widespread support of economic policies (albeit gradually with less intensity) and by the favourable financing conditions in the region which, though they have recently tightened, remain accommodative in historical terms. One key conditioning factor will be inflation, which has risen notably across the region as a whole, and, specifically, how transitory this development proves. Given the high uncertainty surrounding the economic outlook, the Report presents alternative scenarios referring to a series of epidemiological, economic and financial variables. The indicators of macro-financial vulnerability in the region remain contained in the external and banking sectors but high in respect of public finances, against a backdrop of notable uncertainty over the future course of economic policies.

  • 07/10/2021
    The role of cryptoassets as legal tender: the example of El Salvador (215 KB) Sergio Gorjón

    On 7 September 2021, El Salvador became the first jurisdiction to adopt bitcoin as legal tender. This initiative has raised as much enthusiasm as it has scepticism and potentially opens the door for other countries to follow suit. The initiative is underpinned by a law passed by the Legislative Assembly, with the more functional aspects left to a series of technical standards drawn up by the Central Bank of El Salvador. To facilitate its operational roll-out, the Government has opted to provide Salvadorans with a digital wallet and has also launched an ambitious educational programme aimed at the population as a whole. International organisations consider that this proposal poses significant risks to the overall economy, potentially compromising the Salvadoran monetary system and the integrity of its financial sector, and undermining the State’s revenue-raising capacity. Many questions remain over the final outcome, which will largely depend on the country’s ability to overcome not only the difficulties evidenced in the initiative’s launch, but also other pre-existing structural shortcomings.

  • 30/09/2021
    Inflation in the United States: recent developments and outlook (935 KB) Fructuoso Borrallo, Alejandro Buesa and Susana Párraga

    Global inflation rates have increased since early 2021, especially in the United States, where there has been an upward surprise in recent months. Part of the US inflation increase is due to a statistical phenomenon stemming from the comparison of current and previous-year prices, which were marked by an across-the-board decline in activity. Further, the economic recovery has prompted a rise in prices in the sectors most affected by the pandemic, it has accentuated certain supply and logistics disruptions, and it has been accompanied by an increase in the price of the energy component. While these factors are considered to be transitory, three upside risks to prices may be identified: first, wage pressures arising from the labour supply and demand mismatch; second, a greater-than-expected inflationary effect of the fiscal stimulus introduced in response to the pandemic; and third, a possible de-anchoring of medium-term inflation expectations. In any event, these transitory effects are expected to feed through relatively moderately to euro area inflation.

  • 28/09/2021
    Corporate bond issuance during the COVID-19 pandemic: a comparison with the global financial crisis (1 MB) Roberto Pascual González

    In the early stages of the global financial crisis and the COVID-19 crisis, bond issuance by non-financial and non-bank financial corporations in the developed economies hit record levels. However, the underlying reasons for this are different: during the global financial crisis, bond issuances were made to replace bank loans, whereas during the COVID-19 pandemic they have been made to address a liquidity problem caused by the restrictive measures adopted to combat the virus. There are also significant differences between the issuances made during the two crises; notably the considerable decline in financing costs on account of lower market interest rates, which may partly explain the longer average duration of bonds, and the greater use of funds to refinance existing liabilities. The issuance of high-yield bonds has also risen and the sectoral breakdown of the issuers has changed.

  • 08/09/2021
    Overview of global and European institutional sustainable finance initiatives (4 MB) Clara Isabel González Martínez

    To contribute to the fight against climate change and achieve a carbon-neutral economy, a large volume of funds must be mobilised to finance the necessary investment. The international financial system will play a key role in this process to channel the financing, but considerable changes will be needed to develop sustainable financing that is sufficiently standardised and transparent to ensure the efficient allocation of funds to activities identified as sustainable. Since the Paris Agreement and the 2030 Agenda were signed in 2015, work has been undertaken in this respect in various spheres, by the G20, the United Nations, the European Commission and central banks, and also in the financial sector. This article describes the main – public and private – institutional initiatives under way at the global and the European level to achieve the transition needed to address climate change.

  • 08/09/2021
    The role of central banks in combating climate change and developing sustainable finance (408 KB) Clara Isabel González Martínez

    The consequences of climate change affect both the financial system and the economy as a whole. Understanding the attendant risks and meeting the goals of the Paris Agreement, so as to restrict the rise in global temperature and mobilise the resources needed to achieve a carbon-neutral economy, is a global challenge for the political and economic authorities. International cooperation is also a must. Central banks are not impervious to these movements and are including on their agendas climate and sustainability-related aspects in various areas, both in the management of own portfolios and in supervision and financial stability. And it is also being discussed how to include these aspects in monetary policy frameworks. While the central role in this arena is, given their nature, for governments, central banks may have an important role as catalysts, leading by example to contribute to achieving the goals of the Paris Agreement. In Europe, the European Central Bank (ECB) and the National Central Banks (NCBs), including the Banco de España, are working to incorporate these matters into their own business areas.

  • 23/07/2021
    The IMF´s resources in the face of COVID-19 crisis (506 KB) Isabel Garrido, Xavier Serra and Sonsoles Gallego

    In the year since the onset of the pandemic caused by COVID-19, the International Monetary Fund (IMF or the Fund) has granted loans and emergency financing to over 85 countries, an unprecedented number. In the past, a shock on this scale would have brought the issue of the sufficiency of its resources centre-stage. However, on this occasion, given the characteristics of the loans granted, the IMF’s general resources have not been excessively squeezed. Pressure has been greater on the concessional resources granted to low-income countries. Against this background, the IMF’s general and concessional resources have two different needs to contend with. In the case of the former, the IMF has the leeway to respond to any future increase in the demand for ordinary financing and, if necessary, it could activate its temporary resources. Conversely, in the case of the latter, it must ensure there are sufficient resources to avert stiffer concessional financing terms for the most vulnerable countries, in what is the most complicated economic juncture of recent decades. The IMF should obtain new borrowed resources as these countries progressively replace emergency assistance with conditional financing.

  • 06/05/2021
    Fiscal Rebalancing plans in the medium term: the case of the United Kingdom (295 KB) Júlia Brunet and Susana Párraga

    The extraordinary fiscal policy response to mitigate the strong economic impact of the COVID-19 pandemic has pushed public debt notably higher, exceeding its peak levels of the last five decades in the main advanced economies. Additionally, support for the economic recovery will foreseeably require maintaining a sizeable fiscal impulse in the short term. In this setting, announcing medium-term plans to rebalance public finances would be suitable, according to the studies available. These plans recoup the countercyclical room for manoeuvre of fiscal policy, as well as anchor economic agents’ expectations and reduce the potential risks of high government indebtedness for future economic activity. This article describes the example of the United Kingdom, the first country to propose a gradual fiscal adjustment programme for the medium term, while maintaining public support for the economic recovery in the short term.

  • 28/04/2021
    Report on the Latin American economy. First half of 2021. Outlook, vulnerabilities and policy space (1 MB) International Economics and Euro Area Department

    The economic recovery in Latin America continued into the first part of this year, but lost momentum owing to the adverse course of the pandemic. Against this macro-financial backdrop, the region’s banking systems remain healthy, although some indicators, such as bank profitability, have started to feel the effects of the persistence of the crisis. The strength of the recovery will be chiefly determined by the course of the pandemic, in particular by how fast the vaccine is rolled out and its effectiveness. It will also hinge on the momentum of foreign demand and commodity prices, the resolution of potential social tensions in the region, global financial conditions, the degree of support from economic policies, whose headroom has narrowed, and regional and global economic safety nets. Given the high level of uncertainty surrounding the economic outlook, the report presents alternative scenarios relating to a series of epidemiological, economic and financial variables. However, it should be noted that, broadly speaking, the region has fewer structural vulnerabilities now than in previous episodes of turmoil. In any event, the complex economic situation reinforces the need for institutional and economic reform agendas that address the region’s structural problems.


  • 21/04/2021
    International capital markets during the COVID-19 crisis (881 KB) Laura Álvarez, Alberto Fuertes, Luis Molina and Emilio Muñoz de la Peña

    This article analyses the main trends in securities issuance activity on international markets in 2020, a year in which capital markets were very buoyant despite the COVID-19 crisis. In 2020, record figures were posted for issues on fixed-income markets globally, driven by the measures adopted by governments and central banks to smooth financing and foment market liquidity. In terms of sectors, issuance by the public sector and non-financial corporations increased, while there were declines in the banking sector. By region, increases in issuance volumes were across the board, with notably greater dynamism in the United States and the United Kingdom. Finally, as regards time horizon, there was a strong increase in the second quarter of the year, with record figures posted. This may have been due to the fact that many issuers attempted to bring forward their issues in that quarter given the enormous uncertainty over the course of the pandemic and future financing conditions. Equity market issues were also notably buoyant, with figures not recorded since 2009.

  • 22/03/2021
    The EU-UK Trade and Cooperation Agreement (TCA) (341 KB) Alejandro Buesa, Iván Kataryniuk, Pilar L’Hotellerie-Fallois and Susana Moreno

    On 20 December 2020 the European Union (EU) and the United Kingdom (UK) signed a Trade and Cooperation Agreement (TCA) setting the terms on which trade relations between both areas will be based. This article describes the essential points of the agreement, in both the trade and financial areas, and the governance framework that will regulate its fulfilment. It further analyses how the TCA will affect both areas’ GDP, and which adjustment measures are being taken to offset potential adverse effects.

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