Risks to the economy in 2026
The shock of the tariffs imposed by the US in April generated pessimistic forecasts for 2025 that have not materialized. According to the IMF, the global economy grew by more than 3% in 2025, and the projection for 2026 is similar. The impact of the tariffs has been mitigated by US reversals, prompted by the response of financial markets and by weakness in the face of Chinese control of rare earth elements, crucial for the digital world and for defense. However, the average tariff in the US is close to 15%, not far from the peak of 20% in the 1930s under the Smoot-Hawley Tariff Act. This does not mean that this increase will not have inflationary consequences for the US and trade diversion between countries. China sells less in the US, but compensates with growing sales in other parts of the world, including Europe. One need only recall the influx of cheap, high-quality electric vehicles into the European market. It's also important to consider that the impact of the tariff—who ultimately pays—depends on whether the exporting company lowers prices to maintain market share, which it will likely try to do in the short term. We see, for example, how Chinese vehicles are sold at reduced prices, which offsets the European Union's tariffs designed to protect the sector. The primary risk for next year is that the US-China trade war will intensify and the effect of the tariffs will be felt later, when exporting companies are unable to maintain low prices. In any case, in the medium term, the tariff increase will lead to less growth.
A second risk is that the overvalued perception of companies associated with artificial intelligence (AI) could lead to a significant stock market correction with consequences for the global economy. The bursting of the dot-com bubble in 2000 serves as an example; it did not have major economic repercussions because it was not a debt crisis, unlike the severe mortgage crisis. subprime From 2007-2009. We can speculate that an AI crisis—for example, large investments in data centers failing to generate the expected returns—will be more or less damaging depending on whether these investments were largely financed with debt or equity capital, something some tech companies are already doing. There's no doubt that AI will have a major impact on the economy; the question is at what pace and which companies will emerge victorious. The market upheaval will cause some companies to fail or others to be acquired.
A third risk is potential dollar instability, given the trajectory of increasing US debt and the volatility of its economic policy decisions. It is unusual for the dollar to depreciate and for demand for US Treasury bonds, the world's safest asset, to weaken during a period of economic disruption, such as April 2025. Normally, the opposite occurs due to the dollar's central role in the global monetary system.
In Europe, Germany's economic problems—with rising energy costs and a struggling export industry like automotive and chemical—could be alleviated by increased investment in infrastructure and defense, potentially pulling them out of recession. France is a cause for concern due to its high debt and lack of fiscal discipline, amidst a political deadlock. Its economic model has been characterized by financing the welfare state through debt issuance, an unsustainable strategy likely to continue through 2026, until markets and the European Central Bank intervene. The risk premium on its public debt is higher than that of Spain or Italy, which now appear more stable; Italy thanks to its controlled public deficit, and Spain due to its economic growth, which is expected to moderate in 2026 but is projected to exceed 2%. The Economist He stated that, among OECD countries, Spain is the fourth best-performing economy in 2025, and Portugal the best. The Ibex has grown by nearly 50%, albeit from a low level.
The results of the Spanish economy are due to a large influx of immigrants, associated with low value-added activities and low wages, and the boost from funds Next GenerationAnd low energy costs from renewables, at least until the major blackout. It's an extensive growth model that is sustainable as long as the tailwinds (tourism, for example) continue. This model doesn't support the welfare state, since it depends less on GDP than on GDP per capita, which is experiencing relative stagnation. However, 2025 revealed signs of improvement in the export of high value-added services. The hope for 2026 is that these will consolidate and that the most advanced sectors will gain weight in the economy.
