As regards gross capital formation, investment in housing will be spurred by the generation of employment and the availability of low-cost financing. This latter factor will also be conducive to business investment, further to the far-reaching clean-up of corporate balance sheets in recent years. With respect to external demand, exports may be expected to continue outgrowing the rate of expansion of the very markets on which they are targeted, which reflects the gains in competitiveness I referred to earlier. But I believe mention should also be made of a structural change, namely the most notable growth in the number of Spanish companies permanently – not just occasionally – orienting their activity towards foreign markets, without forgetting the gains in market share in their domestic markets, as gains in competitiveness enable firms to compete better not only abroad but also, obviously, in the domestic market against imports. Risks The Spanish economy has moved into 2018 on the back, we may say, of significant expansionary inertia. On the external front, and in Europe as a whole, we do not yet know and it is not easy to estimate the impact that the United Kingdom’s exit from the European Union may have, the impulses that the protectionist policies in various countries are prompting and the effects that may stem from the re-balancing of the Chinese economy.
However, substantial cross-country differences persist in this area, with unemployment levels ranging from below 4% in Germany to 20% in Greece. The favourable financing conditions associated with the extraordinary monetary policy measures implemented by the Eurosystem have no doubt been one of the essential determinants behind the economic recovery transforming into a vigorous expansion. To illustrate this, the estimates made by the Banco de España suggest that the monetary policy measures contribute to accounting for practically half the euro area economy’s observed nominal growth since mid-2014. Adding to this is the greater buoyancy of world trade, which recouped growth rates not observed in the five previous years. This result reflects the favourable cyclical juncture at which many advanced and emerging economies now stand, but also a true recovery in the sensitivity of trade to global growth, despite the protectionist threats that have emerged and that may put a brake on this fundamental engine for economies as open as the European ones are. The strength of exports has contributed notably to sustaining the greater buoyancy of the aforementioned investment. Another factor contributing to the expansion has been the headway in the ongoing deleveraging that households and firms have had to undertake. Currently, in the area as a whole, household and corporate debt is drawing closer to observed pre-crisis levels, with a greater correction in the more vulnerable countries being discernible. Fiscal policy, too, retains at present a more neutral stance, following the public finances consolidation process pursued.