comes to explaining the intensity and duration of the current upturn. in this respect, it is worth mentioning the continuing and notable positive external balance and the subsequent reduction in the economy ’ s – and in particular the private sector ’ s – over - indebtedness ; such progress has proven vital for restoring the confidence of foreign investors and of spanish households and firms. the current account balance stood at close to 2 % of gdp in 2017, a similar figure to that observed the previous year and up on the figures recorded in the early years of the recovery. true, some factors that have contributed to this improvement in the economy ’ s external balance have effects that tail off over time. this is the case of oil prices which, despite their recent rise, remain lower than those in force until mid - 2014. also, the improvement in financing conditions in recent years has provided for significantly lower interest payments abroad. other explanatory factors behind the improvement in the balance vis - a - vis the rest of the world are structural in nature. i refer here to the economy ’ s enhanced competitiveness, the most striking manifestation of which is, perhaps, the notable correction observed since the start of the crisis in unit labour costs compared with the euro area as a whole. it is thus notable that, unlike previous expansions, the current phase is characterised by the fact that the increase in spanish household and business spending is proving compatible with the deleveraging of the economy, meaning that we are not – if you will allow me the expression – “ buying ” growth at the expense of credit from the rest of the world. this confers upon the current expansion a more sustainable nature over time and one less vulnerable to potential sources of risk. the outlook what may we then expect in the coming years? here i shall refer to the latest projections by the banco de espana, published last december. the baseline scenario expects the expansionary phase to continue over the next three years, in a setting in which progress in correcting imbalances will continue to support both domestic spending and exports. at the same time, the growth rate of gdp is expected to be somewhat less high than that observed in the past three years. in terms of components, the increase in output in the coming years will continue to be underpinned both by the buoyancy of private national demand and by the positive contribution of net external demand. as regards national demand, a moderate slowdown in private consumption may be expected, against the backdrop of smaller

increases in employment, following several years of strong growth as a result of pent - up demand during the crisis. investment in housing will continue to grow notably, boosted by job creation and the availability of credit under favourable conditions. also, business investment will remain robust, in line with the expected course of final demand, against a background of most notable headway in the ongoing restructuring of corporate balance sheets and of persisting easy financial conditions. turning to external demand, the cumulative gains in competitiveness that i referred to and the sound outlook for the international economy as a whole and, in particular, for the euro area, are expected to continue making for a dynamic spanish export performance. risks this predominantly favourable scenario is subject to various sources of risk. for example, developments on global financial markets. in february we saw how the high valuations attained by certain financial assets can give rise to bouts of price corrections and notable rises in volatility. any future intensification of these episodes, which to date have originated in us markets, might have adverse consequences for economic activity and for financial stability. furthermore, it is complicated to anticipate how brexit, and its consequences in terms of trade in goods and services or in movements of people and capital, will unfold. but, in any event, protracted uncertainty over the final agreement intensifies the risks of an adverse impact on activity. on the domestic front, the risks associated with the political situation in catalonia remain. the baseline scenario of our december projections included the negative effects of the increase in uncertainty relating to political tensions. specifically, on that occasion it was considered that the scope of the events already observed would be relatively limited and temporary, albeit not negligible. so far, the information available appears to confirm that recent economic developments are not far removed from the scenario anticipated, with effects that appear to have been confined to catalonia. specifically, since summer 2017, the performance of the catalonian economy appears to have been relatively worse than that of the rest of spain in terms of the figures, for example, on domestic spending and tourism. elsewhere, the indicators measuring the degree of economic and financial uncertainty suggest a reduction in this variable. the incidence of this source of risk will depend on the intensity and persistence of the tensions. an easing in these tensions might lead to higher growth than that considered in our december projections. conversely, a hypothetical rebound in tensions might lead to an increase in uncertainty resulting in a more pronounced impact on agents ’ spending decisions.