España

The conflict in the Middle East has renewed inflationary pressures in Spain through higher energy and commodity prices, further weakening a growth outlook already strained by rising trade tensions. Domestic demand remains strong for now, but a prolonged closure of the Strait of Hormuz would push Europe closer to recession and inevitably also weigh on the Spanish economy.

Spanish goods exports exhibit greater responsiveness to EU trade agreements than those of other member states, with the divergence becoming more pronounced over time. Where trading partners share historical or linguistic ties with Spain, export growth is driven primarily by the intensive margin; where such ties are absent, the expansion of the export basket through the addition of new products plays a comparatively more important role.