In remarks at CREO 2026, Bank of Spain Director General for Economics David López Salido assessed how geopolitical fragmentation, artificial intelligence and demographic change could reshape inflation, financing conditions and economic resilience. Supply disruptions and trade barriers may make inflation more volatile and periodically higher, while rising public and private investment needs could push medium-term real interest rates above pre-pandemic levels. Artificial intelligence may lower costs through productivity gains, but these benefits depend on investment, skills, reliable data, cybersecurity and effective governance. Spain enters this environment with comparatively strong household, corporate and bank balance sheets, supported by post-crisis deleveraging. However, improved corporate solvency has not translated fully into productivity per worker, pointing to a need for greater investment and capital per employee, particularly among smaller firms. Public debt remains a vulnerability despite a declining debt ratio, requiring a credible fiscal path and a composition of spending and revenue that supports investment, employment and productivity. López Salido identified housing access as a major economic and social challenge, particularly for younger people and renters. He called for public and private resources to increase affordable housing supply, supported by flexible and stable regulation that accelerates construction, protects vulnerable households and coordinates action across central, regional and local governments.
Bank of Spain highlights fiscal and housing vulnerabilities as global shifts threaten more volatile inflation and higher interest rates
Bank of Spain Director General for Economics David López Salido warned that geopolitical, technological and demographic shifts could bring more volatile inflation and higher medium-term real interest rates. Spain benefits from strong private-sector and bank balance sheets, but must address weak productivity growth, public debt and housing shortages through investment, credible fiscal policy and increased affordable housing supply.