López Salido warns of more volatile inflation and higher real rates
Speaking at CREO 2026 in Madrid on October 14, 2026, Banco de España Director General of Economics David López Salido warned that geopolitical, technological and demographic changes demand greater economic and financial resilience.
Supply shocks meet investment demands
López Salido warned that trade barriers, energy shocks and supply bottlenecks can raise costs nonlinearly, making inflation more volatile and sometimes higher.
AI offers offsetting productivity gains, conditional on investment, skills, reliable data, cybersecurity, competition and institutional governance.
Citing Charles Goodhart and Kenneth Rogoff, he said financing needs for defense, energy, climate adaptation, aging and AI may outpace savings, raising medium-term real rates above pre-pandemic levels; risk premiums may also rise.
Drawing on Mervyn King, former Bank of England governor, he distinguished measurable risk from uncertainty about possible events.
He urged stronger financial buffers and capital markets to absorb shocks and sustain credit.
Stronger balance sheets meet constraints
Spain's households, firms and banks have strong balance sheets by historical and euro area standards, López Salido said.
The 2025 Annual Report links improved corporate solvency since 2014 to better capital and labor allocation and recovering total factor productivity.
Productivity per worker has not fully benefited: investment and capital per employee remain priorities, especially for small firms.
Public debt remains a vulnerability despite its declining ratio.
He called for a credible fiscal path that preserves investment, employment and room to respond to shocks.
Housing supply takes priority
López Salido identified housing access as Spain's major economic and social challenge, particularly for young people.
He urged public and private funding for affordable supply, faster development and stable regulation.
Central, regional and local authorities must coordinate action and prioritize vulnerable households, he said.