Spain Economic Forecast

Spain Economic Outlook

February 4, 2020

A preliminary estimate revealed that the economy ended 2019 on a solid note, with quarterly growth picking up slightly from the third quarter on the back of an upbeat external sector—beating market expectations and outperforming major Eurozone peers. Despite a subdued global trading backdrop, exports expanded robustly but imports contracted amid disappointing domestic demand. Notably, household spending, which has long been the engine of growth, flatlined in Q4, marking the worst outturn in over six years. Meanwhile, in politics, Socialist Party leader Pedro Sánchez narrowly won parliamentary backing in a second-round vote on 7 January to form a coalition government with leftist United We Can (UP), with its leader Pablo Iglesias named as one of his deputies. The new government, however, falls short of a majority, thus casting uncertainty over the extent of its policy agenda implementation and ultimately whether it will last a full four-year term.

Spain Economic Growth

Economic activity is expected to wane this year amid the maturing business cycle. Healthy private consumption, however, will help cushion the slowdown, supported by the minimum wage hike and contained inflation. Key downside risks persist, with increased competition to the vital tourism industry, weaker demand from the EU and policy uncertainty all clouding the outlook. FocusEconomics panelists forecast growth of 1.6% in 2020, which is unchanged from last month’s forecast, and 1.6% again in 2021.

Spain Economy Data

2014 2015 2016 2017 2018
Population (million)46.546.446.446.446.4
GDP per capita (EUR)22,34023,21924,00625,03625,882
GDP (EUR bn)1,0381,0781,1141,1621,202
Economic Growth (GDP, annual variation in %)1.43.83.02.92.4
Domestic Demand (annual variation in %)2.04.12.13.12.7
Consumption (annual variation in %)1.52.92.63.01.8
Investment (annual variation in %)4.74.92.45.95.3
Exports (G&S, annual variation in %)4.34.35.45.62.2
Imports (G&S, annual variation in %)6.65.12.66.63.3
Industrial Production (annual variation in %)1.23.21.93.20.3
Retail Sales (annual variation in %)0.94.23.90.70.8
Unemployment Rate24.422.119.617.215.3
Fiscal Balance (% of GDP)-6.0-5.2-4.3-3.0-2.5
Public Debt (% of GDP)10099.399.298.697.6
Inflation Rate (HICP, annual variation in %, eop)-1.1-0.11.41.21.2
Inflation Rate (HICP, annual variation in %)-0.2-0.6-0.32.01.7
Inflation (PPI, annual variation in %)-1.3-2.1-3.14.43.0
Policy Interest Rate (%)-  -  -  -  -  
Stock Market (annual variation in %)3.7-7.2-2.07.4-15.0
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)1.12.03.22.71.9
Current Account Balance (EUR bn)11.221.835.431.123.3
Trade Balance (EUR billion)-24.5-24.2-18.8-24.7-33.8

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Spain Facts

Value Change Date
Bond Yield0.465.62 %Dec 31
Exchange Rate1.120.65 %Dec 31

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