Global tensions, energy shocks, and housing risks shape economic outlook
Banco de España Deputy Governor Soledad Núñez presented an assessment of geopolitical risks, the macroeconomic environment, and the Spanish housing market on March 19, 2026. Her speech highlighted increased energy price volatility, financial market reactions to global conflicts, and persistent housing price growth in Spain.
Geopolitical shocks ripple through markets
The Deputy Governor highlighted the significant impact of geopolitical tensions on global markets, particularly following the recent conflict involving Iran.
Analysis from Polymarket and AI conflict monitors suggests a low probability of rapid resolution and an elevated risk of escalation.
This has led to substantial increases in energy prices, with crude oil rising 42 percent and natural gas 56 percent between February 27 and March 13. The volatility in the oil market, measured by the OVX index, surged 84 percent, placing this event in the 99.5th percentile historically.
Financial markets reacted sharply, experiencing declines in major stock indices like the S&P 500 and Euro Stoxx 50, alongside a widening of sovereign bond spreads across the Euro Area.
The US dollar also appreciated, acting as a safe-haven asset amidst the heightened uncertainty.
Euro Area growth steady, inflation moderates
Turning to the macroeconomic environment, the Euro Area's GDP grew by 0.2 percent in the fourth quarter of 2025, aligning with previous forecasts.
Spain's economic growth notably surpassed these projections.
Purchasing Managers' Index (PMI) data indicated stable activity in the Euro Area up to February, contrasting with signs of weakness observed in the United States and China.
Inflation in the Euro Area remained consistent with December projections, with the overall rate at 2.3 percent in February.
In Spain, headline inflation also showed moderation through February, largely driven by a deceleration in energy components, while services and non-energy industrial goods continued to contribute to core inflation.
Housing: Price Surge, Supply Gap, Contained Risk
Spain's housing market exhibits persistent price growth, primarily due to a significant imbalance between new housing supply and household formation.
While prices have decoupled from income and interest rate trends to levels last seen in 2003, the overall synthetic risk indicator remains contained at 2001 levels.
This suggests clear vulnerabilities exist, yet the market does not signal an immediate systemic crisis, requiring continued close monitoring.