BBVA Research

The execution of grants and public tenders under the Recovery, Transformation and Resilience Plan has reached 58% of the planned investments, equivalent to 2.9% of GDP. It is estimated that over 1,100,000 beneficiaries—mainly SMEs and individuals—have already received support.

The Historical Balance of Public Sector Borrowing Requirements (HBPSBR) was 51.4% of GDP at the end of 2024. We expect the HBPSBR to be 53.0% at year-end with a public deficit and PSBR of 3.8% and 4.3% of GDP, respectively.

China’s banks face headwinds in 2025 amid weak credit growth, low profitability, and property sector stress. Narrowing interest margins and declining lending rates have pushed ROA and ROE to record lows. Real estate woes, LGFV debt, and US tariffs weigh heavily on the sector, while links to shadow banking grown modestly.

Construction GDP grew 2.6% thanks to a 6.9% increase in building construction, despite the decline in other subsectors. The mortgage market increased its number of loans by 10.7%, primarily due to the recovery of affordable housing.