Publications

Analytical Articles

The Analytical Articles present various subjects relating to the economy and finances of Spain, the euro area and the international environment. They seek to bring the papers and analyses of the Banco de España to the attention of a broad public audience interested in current economic and financial affairs.

Since January 2017, the Analytical Articles have been disseminated ahead of the publication of the related quarterly Economic Bulletin and are listed by release date or by subject.

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  • 22/07/2020
    The financial position of the workers most affected by the pandemic: an analysis drawing on the Spanish Survey of Household Finances (381 KB) Pilar Alvargonzález, Myroslav Pidkuyko and Ernesto Villanueva

    In the European economies, employment in the retail sector, in accommodation and food services and in the arts and recreation activities has been hit especially hard by the pandemic, so it is important to ascertain the financial resources that the individuals working in these sectors have available to withstand a possible fall in their income. This article draws on the Banco de España’s Survey of Household Finances (EFF, by its Spanish abbreviation) to characterise the financial position of the workers most affected by the present crisis. In 2017, these sectors employed approximately half of all women and the under-35s, two population groups with relatively lower labour income levels. In many cases, these workers lived in households that included higher income earners, which may partially mitigate the incidence of possible job losses. Even so, in 2017, 28% of those employed in the sectors affected lived in households whose financial assets amounted to less than one month’s income, and one in 12 lived in households for which debt repayments amounted to more than 40% of their pre-tax income. Among the workers in the sectors most affected by the pandemic, the financial position of those who were less able to work from home and those employed in the accommodation and food services and arts and recreation sectors was relatively more vulnerable.

  • 21/07/2020
    Consumption in Spain during the state of alert: an analysis based on payment card spending (369 KB) José González Mínguez, Alberto Urtasun and Miguel Pérez García de Mirasierra

    In recent years, information on the usage of cards as a means of payment has been increasingly used as an indicator of private consumption. The advantages of such information include its daily frequency and the short time lag from the moment of spending until it becomes available. This article uses this indicator to analyse Spanish household consumption since the state of alert was declared in mid-March and to explore the corresponding determinants. Indeed, the drop in consumption during the COVID-19 health crisis has been far greater than that suggested by the usual determinants, indicating that other factors could largely explain the developments observed. Included here are the greater uncertainty as to the course of the disease and its economic repercussions, and the restrictions on people’s movement and on various economic activities during the state of alert. Card payment data can be used to investigate the importance of social distancing measures when explaining the developments observed in consumption since mid-March. The article identifies that the indicators of payment card usage show a high correlation with the course of the restrictions on movement and activity. The information available also shows how in-person purchases were replaced by online shopping during lockdown.

  • 17/07/2020
    Market microstructure factors in the determination of oil prices (1 MB) Carlos González Pedraz and María Teresa González Pérez

    On 20 April 2020 the West Texas Intermediate (WTI) oil futures price for May delivery turned negative for the first time in history. Other crude prices also posted very low values and their volatility soared, far more than that on stock markets. This article analyses the differences between the spot and futures markets for crude, demonstrating the key role they played in the source and subsequent correction of this event, which affected above all WTI contracts more than Brent. The article also highlights the increasingly significant presence of oil exchange-traded funds (ETFs) and their growing use as a retail investment instrument.

  • 14/07/2020
    Bank Lending Survey. June 2020 (413 KB) Álvaro Menéndez Pujadas

    The latest results of the Bank Lending Survey are very much marked by the impact that the COVID 19 pandemic has had on economic activity and, in consequence, on the credit market. Thus, during 2020 Q2, the credit supply to enterprises eased in Spain, highly influenced by the establishment of the government-backed ICO COVID 19 credit line. In the euro area, the credit supply to enterprises presented little change, in contrast to the significant tightening recorded during the previous financial crisis, owing both to the impact of the tax and economic policy measures adopted and to banks’ stronger capital positions. Both in Spain and the euro area, credit standards and terms and conditions for lending to households tightened, largely as a result of the increase in perceived risk and the deterioration of the economic outlook overall. As regards credit demand, loan applications by enterprises rose sharply both in Spain and the euro area, on account of the increase in their liquidity needs primarily to fund working capital. By contrast, households’ demand fell markedly, against a backdrop of growing economic uncertainty.

  • 09/07/2020
    Results of non-financial corporations in 2020 Q1 (471 KB) Álvaro Menéndez Pujadas and Maristela Mulino

    The data from the Central Balance Sheet Data Office Quarterly Survey (CBQ) for 2020 Q1 show that the lockdown measures introduced in the context of the COVID-19 health crisis had a sharp adverse impact on the activity of the sample firms in the first quarter of the year. This led to a sharp contraction in ordinary profit and profitability levels, even reducing final net profit to a negative aggregate value, something that had not happened in the CBQ since 2002. In addition, the need to cover operating deficits contributed to a rise in these firms’ debt, and the share of ordinary profit (gross operating profit plus financial revenue) used for interest payments also rose slightly, reversing the downward trend of this ratio in recent years. The article includes a box that analyses firms’ liquidity needs in 2020 Q1 (as a result of the fall in activity, investment in real assets and debt repayments) and the financial deterioration recorded by these firms.

  • 02/06/2020
    The Balance of Payments and International Investment Position of Spain in 2019 (608 KB) Pana Alves, Esther López, César Martín and Irene Roibás

    According to the balance of payments statistics, Spain’s net lending stood at 2.3% as a percentage of GDP in 2019, slightly down on the prior year, against a backdrop of continued, albeit slowing, economic growth. Developments in net lending are explained by the reduction in the capital account surplus, resulting from the decrease in funds from the EU, stagnation in tourism receipts as a percentage of GDP and the widening of the deficit on non-energy goods, which offset the improvement in the energy balance prompted by the decline in oil prices. There has been an abrupt change in the outlook for the economy’s external balance as a result of the COVID-19 health crisis, with major uncertainty in the near future about the scale (and even sign) of its effects on this balance, against a backdrop of a drastic reduction in the foreign goods and services trade. For the time being, the information on the balance of payments relating to March shows a net borrowing position, for the first time in that month since 2012, associated with the sharp fall in tourism receipts caused by the measures to restrict movement adopted in Spain and in source countries. Future developments in inbound tourism, in particular, will depend greatly on how quickly restrictions on movement are lifted. This, in turn, hinges both on how the pandemic continues to unfold and on risk perception, which could lead potential tourists to voluntarily adopt social distancing measures. In 2019, the negative net international investment position of the Spanish economy decreased for the fifth year running, to stand at 74% of GDP, its lowest level since 2006. These developments, which represented the biggest fall in the last seven years, were underpinned by the nation’s net lending position, the positive amount of valuation effects and GDP growth. In terms of financial flows, excluding the Banco de España, the surplus balance of financial transactions of the Spanish economy was lower than in 2018, influenced by the rise in purchases of general government debt by international investors, which was only partially offset by the fall in foreign direct investment inflows. For the first time since 2014, the financial account of the Banco de España showed a surplus, affected by certain changes in the implementation of the ECB’s monetary policy.

  • 27/05/2020
    The heterogeneous economic impact of COVID-19 among euro area regions and countries (488 KB) Elvira Prades Illanes and Patrocinio Tello Casas

    The global spread of COVID-19 and, above all, the social distancing measures adopted to contain the health crisis have resulted in a significant standstill in economic activity in most economies. The economic impact on different countries’ or regions’ economies may vary significantly depending on their respective productive structures and will also be influenced by the cross-sectoral customer-supplier relationships in the domestic and international supply chains. This article investigates how the impact of the shock triggered by COVID-19 may vary depending on these two characteristics: differences in the productive structure and cross-sectoral connections. First, the impact of two different scenarios envisaged for Spain on the value added of its different regions (Comunidades Autónomas) is quantified. Then, those same scenarios are used to estimate the impact of an identical shock on the largest euro area countries (Germany, France, Italy and Spain). The findings confirm that the effects of the restrictions imposed on economic activity in Spain to contain the pandemic vary according to the region on account of the different productive structures and cross-sectoral relationships. Broadly speaking, it appears that the estimated impact is significantly higher in the regions most exposed to the sectors related to accommodation and food service activities, such as the island regions. The impact would also be high in other regions, which tend to be those where the manufacturing of vehicles is of particular importance, due not only to the closure of production plants, but also to the spillover effect on other sectors. By applying to the main euro area economies the same degree of sectoral shutdowns as that observed in the Spanish economy, the impact on Germany, France and, to a lesser extent, Italy is comparatively smaller than in Spain. The differences in productive structure and cross-sectoral connections render the Spanish economy relatively more vulnerable to a common shock such as the current pandemic due to its greater reliance on those sectors particularly stricken by the social distancing measures.

  • 25/05/2020
    Intergenerational employment trends in Spain in recent decades (512 KB) Sergio Puente and Ana Regil

    This article analyses the employment possibilities of the new generations, in comparison with those of previous generations at a similar age. The generational standpoint offers several interesting findings. First, in each age bracket, average real wages received by skilled workers have declined over the generations, while those received by less skilled workers have scarcely changed. Second, when these wage data are combined with the amount of time worked, it is found that in recent times there has been a widespread drop in average annual wages. This decline in annual employment income experienced by the younger generations appears to have a certain cyclical component. Lastly, in terms of job insecurity, the younger generations face a slightly lower temporary employment ratio, but those who continue with temporary contracts suffer a higher degree of turnover. The rate of growth of part-time employment has increased, especially among the younger generations with a low or medium level of education.

  • 20/05/2020
    Transferability of workers' skills in sectors potentially affected by Covid-19 (372 KB) Brindusa Anghel, Aitor Lacuesta and Ana Regil

    This article analyses the characteristics of workers who are potentially more affected by the COVID-19 crisis and their employment possibilities in other productive sectors. Sectors related to travel, accommodation and food services, leisure and wholesale and retail trade, which have been particularly affected by the measures adopted to limit the impact of the pandemic, concentrate 19.6% of total employment in Spain. On the other hand, sectors related to distribution, logistics and information and communication –demand for which appears to be less affected or might even have increased during the lockdown– account for 7.4% of total employment. Among the workers from sectors that are most affected, the proportion of women, young adults, the lesser-skilled, and workers with less experience and with temporary contracts, is especially high. The analysis based on the tasks performed by workers in the different sectors suggests that the potential mobility of the employees that have been hardest hit by the crisis is scarce, especially in accommodation and food services and in wholesale and retail trade, in part owing to the limited intensity of use in those sectors of tasks associated with information and communication technologies, writing, reading and numerical skills. However, workers in sectors related to shipping and leisure or entertainment activities might have more opportunities of finding a job in other areas. These results point to the need to support training in certain skills for the potentially unemployed in the sectors most affected by the pandemic in order to facilitate their transition to new vacancies.

  • 13/05/2020
    Foreign investment in the residential real estate market in Spain between 2007 and 2019 (375 KB) Laura Álvarez, Roberto Blanco and Miguel García-Posada

    This article analyses changes in investment by foreigners in the residential real estate market in Spain between 2007 and 2019. Two indicators are used for this purpose: gross purchases by foreigners as a percentage of total transactions and net purchases (purchases less sales) relative to the housing stock. A distinction is made between resident foreigners and non-resident foreigners. Non-resident foreigners who invest in the Spanish real estate market mainly come from high-income European countries, while resident foreigner buyers are mostly from countries from which Spain receives immigration, such as Romania and Morocco. The article also shows how non-resident foreigners concentrated their purchases in the islands and in the Mediterranean coastal provinces, while residents distributed their purchases more evenly throughout Spain. Finally, there is no statistical evidence supporting the hypothesis that investment by non-resident foreigners has in itself contributed significantly to an increase in house prices. However, the high correlation between population growth and the increase in real estate prices suggests that the increase in the foreign population resident in certain provinces, particularly in the islands, appears to have contributed to raising house prices through its effect on the demand for property.

  • 12/05/2020
    Teleworking in Spain (434 KB) Brindusa Anghel, Marianela Cozzolino and Aitor Lacuesta

    As a result of the boost given to teleworking by the current crisis, this article analyses the potential of this form of work in Spain and the capacity of different socio-demographic groups to benefit from it. According to the Spanish Labour Force Survey, the percentage of the employed who, at least occasionally, work from home amounted to 8.3% in 2019, up 2.4 percentage points (pp) from 2009. By occupation type, remote working is more frequent among the self-employed, small companies and skilled occupations. Furthermore, this form of work is still infrequently used in certain sectors of activity which could have been bolstered by new technological developments, such as manufacturing, public administration, transportation and storage, administrative activities, wholesale and retail trade and other service activities. The types of workers, having taken into account the characteristics of their jobs, who work remotely are usually individuals aged between 35 and 65 and those with university studies. An analysis of the intrinsic characteristics of each occupation estimates that about 30% of persons employed could telework, at least occasionally, and, consequently, there is considerable room for improvement in the application of these working arrangements. However, this potential increase is asymmetrical and not all workers are going to be able to take advantage of these arrangements since those with a lower level of educational attainment will find it difficult to be able to benefit from them.

  • 29/04/2020
    Report on the Latin American economy. First half of 2020 (1 MB)

    This article analyses the recent performance of the main Latin American economies (Brazil, Mexico, Argentina, Colombia, Chile and Peru). Economic developments in the region have progressively been influenced by the global spread of the coronavirus COVID-19 pandemic. Although it has reached Latin America with some delay compared to Europe and the United States, it shows a similar pattern of dissemination. Moreover, the region faces this pandemic in an economic situation which had already beforehand shown signs of weakness owing to various idiosyncratic reasons, related in part to the bouts of social tension in the final stretch of last year. Some factors, such as high labour market informality and the improvable quality of some institutions, may act as amplifiers of the impact of the health crisis. From the economic standpoint, the pandemic is affecting the region through various key channels, namely the trade, commodities, tourism, financial and domestic demand channels. The national containment measures, the impact of the pandemic on the population, the global nature of the shock and the differential effects on the region are seeing analysts revise their GDP forecasts for 2020 notably downwards, with a balance of risks tilted to the downside. The monetary and fiscal authorities have responded, swiftly adopting measures. Although the region has in recent years consolidated progressively more robust monetary and fiscal policy arrangements, it has less monetary and fiscal space than at the start of the 2008-2009 crisis. Moreover, the Latin American economies, with the exception of Peru, have notably increased their external debt since 2008, though they have more international reserves than in the previous global crisis. Against this background, the resolute response by national policies should ideally be supported by a coordinated global response, led by the main multilateral agencies and geared to minimising the possible long-term adverse effects on the region’s economies.
    Three boxes accompany this report. The first considers the causes and potential effects of the social tensions in some of the region’s countries in the closing months of 2019. The second examines the process of integration of Latin America into global trade and its results, analysing the challenges outstanding if the region is to fully reap the benefits of greater trade integration. The third sets out some simulations made on the basis of a global macroeconometric model to illustrate the potential adverse effects of COVID-19 on economic activity in the main Latin American economies.

  • 28/04/2020
    April 2020 Bank Lending Survey in Spain (573 KB) Álvaro Menéndez Pujadas

    According to the Bank Lending Survey, in 2020 Q1 credit supply contracted slightly in both Spain and the euro area, affecting practically all the segments analysed. Demand for loans continued to fall in Spain across the board, although firms’ demand fell at a slower rate than in the prior quarter. In the euro area as a whole, firms’ demand for funds surged, while that of households slowed. Banks expect the COVID-19 pandemic to have a greater impact in 2020 Q2, especially in the case of demand for financing. For instance, they anticipate an upsurge in firms’ demand for loans between April and June, likely driven by their high liquidity needs. Should these expectations materialise, it would be the largest increase in demand recorded in this segment by the survey since it began in 2003. Conversely, amid growing economic uncertainty financial institutions foresee a slump in demand for loans from households. Furthermore, these intermediaries expect to ease credit standards for loans to firms during those months, foreseeably on account of the State guarantee schemes launched in several countries. According to the respondents, the measures adopted by the ECB (expanded asset purchase programme, negative deposit facility rate and TLTRO III) continued to help relax the credit supply terms and conditions and to contribute to a rise in lending volumes.

  • 20/04/2020
    Reference macroeconomic scenarios for the Spanish economy after Covid-19 (648 KB)

    COVID-19 has spread globally, and most countries have adopted extraordinary measures to mitigate its effects on public health. These include bringing part of economic activity to a standstill and the confinement of the population, and they are exerting a most severe contractionary effect on GDP and employment worldwide. While the resolute action of national and supranational authorities will contribute to alleviating these effects, their magnitude remains, for the moment, highly uncertain.
    This article develops a set of scenarios for the Spanish economy that consider various alternative assumptions about the duration of the confinement and the persistence of the shock the economy has undergone. In this connection, two different methodologies are used. The first rests on an assessment of sectoral output losses as a result of the epidemic containment measures; the second is based on simulations of the main transmission channels of the economic effects of the pandemic, using the Banco de España Quarterly Model (MTBE). The results of the different scenarios point to reductions in Spanish GDP in 2020 unprecedented in recent history. That said, the scale of the reductions is highly sensitive to the starting assumptions, over whose plausibility there is much uncertainty. Once the height of the crisis is behind us in the short term, activity should begin to recover at a rate which will in any event depend on how the health risk is perceived in the coming months and on the capacity for recovery of that part of the productive system most damaged by the current shutdown. With a view to 2021, foreseeably the Spanish economy will substantially - but not fully – recoup the course of activity and employment expected before the pandemic.
    It is necessary to highlight, in any case, the provisional nature of these calculations. They must be subjected in the coming months to ongoing revision as new information progressively becomes available.

  • 23/03/2020
    Results of non-financial corporations to 2019 Q4. Preliminary year-end data (480 KB) Álvaro Menéndez Pujadas and Maristela Mulino

    According to the Central Balance Sheet Data Office Quarterly Survey, non-financial corporations’ activity lost momentum in 2019, resulting in a slowdown in job creation. However, the high inflow of dividends contributed to an increase in ordinary profit and, as a result, average levels of return on ordinary activities also grew. In addition, financing costs continued to decline, allowing the spread between the return on investment and this indicator to widen again. Extraordinary costs and revenue had an adverse impact on net profit, triggering a notable decline. Average debt ratios, expressed as both a percentage of assets and as a percentage of ordinary profit, continued to fall in 2019. The share of profits used to service debt also continued to decline and stands at a record low. The article contains a box analysing the recent developments in trade finance and the average supplier-payment and customer-collection periods.

  • 17/03/2020
    The EU-MERCOSUR free trade agreement: main features and economic impact (383 KB) Jacopo Timini and Francesca Viani

    This article describes the main characteristics of the trade agreement reached between the European Union (EU) and the Common Market of the South (MERCOSUR) in 2019 and presents estimates of its possible impact on trade and GDP in the two areas.
    It is an ambitious agreement involving the full liberalisation of almost all of the goods trade between the two blocs, facilitating the provision of services and the reduction of non-tariff barriers, and envisaging reciprocal liberalisation of public procurement. Similarly, it includes provisions on the protection of the environment and workers’ rights.
    The agreement’s estimated effects on trade and economic activity will be significant for MERCOSUR. The impact for the EU will be more modest, yet always positive, since trade with MERCOSUR is less significant for EU members. Spain is among the EU member countries whose economies will benefit most from the agreement.

  • 05/03/2020
    Population at risk of poverty or social exclusion in Spain, according to the European Council definition (215 KB) Aitor Lacuesta and Brindusa Anghel

    This article describes the concept of population at risk of poverty or social exclusion that is used to quantify the targets set in this respect for the countries of the European Union. Drawing on this definition, the article analyses how poverty in Spain has evolved. It also examines the factors that have contributed to poverty levels in Spain still being above the official targets for 2020 and the average of the rest of the countries of the European Union. Lastly, some aspects of the definition are identified that suggest that the concept of economic poverty should be addressed from several complementary standpoints.

  • 20/02/2020
    Recent developments in financing and bank lending to the non-financial private sector 2019 H2 (568 KB) Pana Alves, Fabián Arrizabalaga, Javier Delgado and Alejandro Ferrer

    In the final stretch of 2019, the funds raised by households and non-financial corporations grew at very moderate rates, somewhat below those recorded in the first half of the year. This occurred against a setting of weak demand for funds, in which credit standards for bank loans had tightened slightly, although the cost of credit declined again, in keeping with the more accommodative monetary policy stance. Deposit institutions’ loan portfolios continued to contract, albeit at a more moderate pace, while their average quality improved, with further reductions in the NPL ratio and in foreclosed assets.

  • 18/02/2020
    Impact of new technologies on financial inclusion (363 KB) Esther Barruetabeña

    Advances in new technologies give millions of people who experience financial exclusion globally the opportunity to access and use financial services. This article describes the main benefits of financial innovation, particularly in emerging economies. It also identifies the main challenges associated with financial innovation, including the potential effects of digitalisation on financial exclusion, and possible ways to address these.

  • 13/02/2020
    The end of the demographic dividend in Latin America: challenges for economic and social policies (478 KB) Juan Carlos Berganza, Rodolfo Campos, Enrique Martínez Casillas and Javier Pérez

    Population ageing is a major global challenge. The Latin American economies have a younger population structure than other emerging and advanced economies, which has allowed them to enjoy the so-called demographic dividend (a favourable working age/non-working age population ratio). However, according to the latest demographic projections of the United Nations (UN), it is estimated that in 2020 the Latin American population pyramid will resemble that of the advanced economies in 1990 and that, by around 2050, both groups will have similar population profiles. This article documents the current demographic trends in Latin America and discusses the main related challenges, in particular, those arising from the adaptation of social welfare systems to population ageing.

  • 11/02/2020
    The relationship between inflation rates in advanced economies (305 KB) Luis J. Álvarez, Ana Gómez Loscos and M.ª Dolores Gadea

    This article analyses the link between the changes in and the drivers of inflation in a broad range of advanced economies, with special emphasis on those of the euro area. Inflation rates are seen to be highly synchronised across countries, especially in the euro area economies, reflecting their close economic and financial links and the common monetary policy. Also, the comovement of inflation is found to be a phenomenon that tends to be more visible in the medium and long-term. At the same time, the synchronisation of core inflation, which is based on products with more stable prices, is seen to be limited. The interdependence of headline inflation, by contrast, is significantly higher and has increased considerably in recent years. The drivers of inflation, according to New Keynesian Phillips curve models, such as inflation expectations, the cyclical position and external prices, also help to explain the relationship between inflation rates in advanced economies and especially in those of the euro area.

  • 06/02/2020
    Ageing, productivity and employment status (596 KB) Brindusa Anghel and Aitor Lacuesta

    The article analyses how labour market participation and the type of work performed change with age. Drawing on data from the OECD’s Programme for the International Assessment of Adult Competencies (PIAAC), it is documented that as people age they gradually lose certain skills relating to their ability to do physical work or use new technologies, or their literacy and numeracy skills. By contrast, as they build up experience, older workers develop better planning skills and a greater ability to supervise the work of others and respond to setbacks. However, the transition between these tasks is not problem-free, especially in certain sectors, such as agriculture, small retail trade, hotels and restaurants and domestic help, which in Spain are more likely to have a higher concentration of older workers with a lower level of education than in the rest of the euro area. In this respect, larger firm size, flexible working environments, retirement schemes with certain specificities relating to skills required in different occupations and an increase in continuing training would all be conducive to a lower decline in productivity and a higher degree of employability of older workers. This is particularly important in Spain’s current demographic context of a gradually ageing population.

  • 21/01/2020
    January 2020 Bank lending survey in Spain (547 KB) Álvaro Menéndez Pujadas

    According to the Bank Lending Survey, during 2019 Q4, credit standards tightened slightly for all categories of lending in Spain, whereas this only affected consumer credit and other lending to households in the euro area. In this segment, the general terms and conditions on new lending eased, both in Spain and in the euro area as a whole. Furthermore, in Spain, the terms and conditions on loans to households for house purchase tightened slightly. Demand for all types of credit in Spain decreased, whereas in the euro area as a whole loan applications from enterprises declined and those from households increased. According to the responding banks, regulatory and supervisory actions on capital, leverage and liquidity had a negligible impact on credit supply in Spain in the second half of 2019, whereas they prompted a slight tightening in the euro area. The NPL ratio contributed to a tightening of credit standards (in consumer credit in Spain and in the other two segments in the euro area). Lastly, as for the ECB’s TLTRO III (the third series of targeted longer-term refinancing operations), the banks’ participation in the September operation was limited and increased significantly in the December operation, as they were essentially attracted by the favourable conditions of this funding.

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