MARKET ENVIROMENT

Annual Report

This chapter includes a summary of the macroeconomic information and content and the environment in which BME and the stock markets have been operating in 2016.

Share prices reflect the uncertainty of a worse-than-expected macroeconomic environment due to geopolitical tensions and reduced growth forecasts for the large emerging economies and in Europe. The US economy appears to be strong but the FED is still delaying hardening its monetary policy. Interest rates are very low across the world, raw materials prices are falling and debt levels are high and this continues to overshadow outlooks and projections. In Spain, economic indicators have improved a great deal but debt volumes and a financial sector that is still not completely healthy draw a question mark over the real strength of the incipient recovery.