Spain Economic Outlook
December 20, 2018The economy seems to have maintained momentum in the fourth quarter, following the third quarter’s robust showing which was fueled by a pick-up in consumer spending. A strong rebound in retail sales and a notable acceleration in tourist arrivals in October, coupled with solid readings for the services PMI in October-November, indicate healthy private consumption. Downbeat consumer sentiment in the first two months of the quarter, however, calls for caution. Meanwhile, a mild rebound in industrial production in October and weak PMI readings in October-November point to tepid growth in the manufacturing sector. On the political front, the European Commission expressed concern about the government’s planned increase in spending and skepticism about the viability of current budget targets at the end of November. Furthermore, the ruling Socialist Party’s setback in Andalusian regional elections in early December, together with growing political tensions with Catalan pro-independence parties, pose growing challenges to the party’s political mandate
Spain Economic GrowthGrowth is set to decelerate next year due to a slowdown in domestic demand, although it should remain healthy nonetheless. Growth in fixed investment is seen moderating on tightening financing conditions and a softening recovery in the housing market. Meanwhile, slowing employment gains due to lower tourist flows, combined with a minimum wage hike and a possible tightening of the labor code, could weigh on private spending. A sizable fiscal deficit together with a burdensome public debt also threaten the outlook. FocusEconomics panelists project growth of 2.2% in 2019, which is unchanged from last month’s estimate, and 1.9% in 2020.
Spain Economy Data
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|Bond Yield||1.35||5.62 %||Jan 18|
|Exchange Rate||1.14||0.65 %||Jan 21|
|Stock Market||9,054||-0.74 %||Jan 21|
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Spain Economic News
January 11, 2019
Industrial production declined 2.6% year-on-year in seasonally- and calendar-adjusted terms in November, contrasting October’s revised 0.7% increase (previously reported: +0.8% year-on-year) and marking the sharpest contraction since May 2013.
January 4, 2019
Reflecting weaker activity growth in the manufacturing sector, the IHS Markit composite Purchasing Managers’ Index (PMI) edged down from 53.9 in November to 53.4 in December.
January 3, 2019
Robust momentum was maintained in the third quarter of the year, according to a second GDP estimate released by the National Statistical Institute (INE) on 28 December.
December 28, 2018
Spain’s current account balance recorded a surplus of EUR 294 million in October, a marked decline from the EUR 1.9 billion surplus recorded in October 2017 and well below the EUR 696 million surplus logged in September.
December 28, 2018
According to data published by the Ministry of Public Works (Ministerio de Fomento), the Spanish Board of Architects (Colegio de Arquitectos Técnicos) granted 8,583 new construction permits in October.