Xavi believes Barcelona are still the favourites to win La Liga despite Real Madrid further strengthening their squad.
Barca retained their league title last season despite signing the likes of Cristiano Ronaldo, Kaka and Xabi Alonso at Madrid, and they have continued to invest this summer as boss Jose Mourinho arrived from Inter along with players including Angel Di Maria, Mesut Ozil and Sami Khedira.
Nonetheless, Barca remain confident of further success in the coming months both domestically and abroad.
In an interview with El Mundo Deportivo, Xavi said: "Barca are the favourites for the title because we are the current champions. Madrid have spent a lot of money in recent years and are desperate to regain the title, but I feel comfortable being billed as the favourites. It's a challenge for us."
One potential problem for Barca is the perceived lack of depth in the squad, with a number of players allowed to depart before the close of the transfer window, but Xavi is confident that their youngsters will provide more than adequate cover if required.
"Our squad is small, but it's very competitive and everyone in it is ready to play," he said. "Some teams have 25 or 26 players but four or five aren't considered by the coach. We also have a youth academy that is going through an extraordinary period, with players of real quality who can step up to the first team at any time.
"We have a good squad. It's competitive and I think there are more advantages than disadvantages to having a small squad."
Barca did bring in a midfield reinforcement in Javier Mascherano, at least, and Xavi believes he will be a valuable addition to the squad. "It seems like a great signing," he said. "He is a hard worker and we will be better with Mascherano."