Spain Economic Outlook
October 26, 2021The recovery likely carried over into Q3, with consumer confidence, economic sentiment and PMI readings hinting at solid dynamics. That said, a still-subdued tourism sector, weak retail sales and downbeat industrial production in July-August call for caution. In other news, government coalition partners ironed out the 2022 draft budget and sent it to the European Commission in mid-October, after having agreed on a new housing bill which includes rent controls for landlords with multiple properties. Although the bill should lend some support to existing tenants, it looks set to discourage real estate investment. Meanwhile, the budget targets a seemingly optimistic 5.0% fiscal deficit for 2022 and includes higher spending on pensions, public workers’ salaries and public investment. It also sees a jump in tax revenues amid several tax hikes, which will likely weigh on the country’s competitiveness ahead.
Spain Economic GrowthGDP should expand solidly in 2022, amid loose fiscal and monetary policies and incoming EU funds, and as households spend accumulated savings. However, high energy prices will eat into consumers’ pockets, while lingering supply shortages could restrain growth. Troubled public finances and potential market-unfriendly labor reforms pose significant downside risks. Our panelists project the economy to grow 6.0% in 2022, which is unchanged from last month’s forecast, and 3.1% in 2023.
Spain Economy Data
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Spain Economic News
October 7, 2021
Industrial output grew 1.8% year-on-year in seasonally- and calendar-adjusted terms in August, which was a deterioration from July's 3.3% increase.
October 6, 2021
The IHS Markit composite Purchasing Managers’ Index (PMI) dropped from 60.6 in August to 57.0 in September, reflecting milder growth in both the services and the manufacturing activity.
October 1, 2021
The Spanish Board of Architects approved 10,280 new construction permits in July, according to data published by the Ministry of Public Works.
September 30, 2021
Spain’s current account balance recorded a surplus of EUR 2.5 billion in July 2021, above the EUR 1.8 billion surplus logged in July 2020 and June 2021’s EUR 0.6 billion surplus.
September 30, 2021
Retail sales slid 0.1% year-on-year in August (July: +0.1% yoy).