Spain Economic Outlook
October 23, 2018
A second release of national accounts data confirmed the economy maintained solid momentum in Q2 on the back of buoyant fixed investment, with growth showing resilience amid the broader Eurozone slowdown. Available data for Q3 hints at slightly moderating activity, however. Although retail sales bounced back in August after contracting in July, it is likely they will grow at a weaker pace on average in Q3 than in Q2, pointing to continued slack in consumer spending. Furthermore, the composite PMI averaged lower in Q3 from the previous quarter, indicating a loss of momentum in business activity. In the political arena, the Socialist minority government unveiled its 2019 draft budget on 15 October. Notably, it relaxes the 2019 fiscal deficit target from 1.3% of GDP presented by the previous administration to 1.8% and outlines higher revenues—to be generated by major tax reforms—and social spending. However, given that chances of parliamentary approval are slim, the 2018 budget is likely to be rolled over.Spain Economic Growth
Growth is expected to moderate next year amid tapering domestic demand. The external tailwinds that helped sustain the recovery in recent years also seem to be morphing into headwinds. The tourism boom has reached its peak and the industry is set to cool, with arrivals expected to be lower already this year, likely dragging on job creation going forward. Moreover, the ECB’s end to its bond-buying program and normalization of interest rates may increase public debt servicing costs. Lastly, higher oil prices could raise the import bill, weakening the country’s external position. FocusEconomics panelists project growth of 2.2% in 2019, down 0.1 percentage points from last month’s estimate, and 1.9% in 2020.Spain Economy Data
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Spain Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 1.61 | 5.62 % | Nov 14 |
| Exchange Rate | 1.13 | 0.65 % | Nov 14 |
| Stock Market | 9,107 | -0.74 % | Nov 14 |
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Spain Economic News
Spain: Industrial production dips for the first time in over two years in September
November 8, 2018
Industrial production fell a marginal 0.1% year-on-year in seasonally- and calendar-adjusted terms in September, contrasting August’s revised 1.0% increase (previously reported: +1.2% year-on-year) and marking the first contraction since July 2016.
Spain: Composite PMI bounces back from multi-year low in October
November 6, 2018
Reflecting stronger activity growth in both the services and manufacturing sectors, the IHS Markit composite Purchasing Managers’ Index (PMI), bounced back from a multi-year low of 52.5 in September to 53.7 in October.
Spain: Housing permits growth decelerates in August
October 31, 2018
According to data published by the Ministry of Public Works (Ministerio de Fomento), the Spanish Board of Architects (Colegio de Arquitectos Técnicos) granted 5,953 new construction permits in August.
Spain: Current account surplus shrinks in August
October 31, 2018
Spain’s current account balance recorded a surplus of EUR 1.8 billion in August, a moderate decline from the EUR 2.6 billion surplus recorded in August 2017 but well above the marginal EUR 107 million surplus logged in July.
Spain: Solid growth maintained in Q3
October 31, 2018
Robust momentum was maintained in the third quarter of the year, according to an advance GDP estimate released by the National Statistical Institute (INE) on 31 October.
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