Spain Economic Outlook
June 26, 2018Pedro Sánchez, leader of the Socialist Workers’ party (PSOE), was sworn in as prime minister on 2 June following a successful parliamentary vote the previous day on the no-confidence motion he introduced against Mariano Rajoy on 25 May. His new government brings in a period of political uncertainty ahead given his party’s minority position, holding just about a quarter of seats in congress. The economic impact should be limited, however, as Sánchez has committed to applying the recently approved 2018 budget and adhering to EU fiscal rules. The political shake-up came against a positive economic backdrop, with GDP expanding a solid 0.7% quarter-on-quarter in Q1 on the back of stronger gains in private consumption and fixed investment. Available data points to a slowdown in Q2, however, with growth of both industrial production and retail sales decelerating markedly in April and the manufacturing PMI also losing momentum in April–May.
Spain Economic GrowthStrong employment growth and relatively subdued inflation should continue to propel private consumption, underpinning growth this year. However, the economy faces mounting headwinds in the short- to-medium term. The key tourism sector, which has experienced a boom in recent years largely a result of surging geopolitical risks in other tourist destinations in the Mediterranean, is showing signs of cooling. Moreover, given Spain’s high energy import dependence, rising oil prices should exert upward pressure on the import bill, likely dragging on growth going forward. FocusEconomics panelists project growth of 2.7% in 2018, unchanged from last month’s estimate, and 2.3% in 2019.
Spain Economy Data
5 years of Spain economic forecasts for more than 30 economic indicators.
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|Bond Yield||1.32||5.62 %||Jul 12|
|Exchange Rate||1.17||0.65 %||Jul 13|
|Stock Market||9,735||-0.74 %||Jul 13|
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Spain Economic News
July 5, 2018
Industrial production lost further steam in May to grew 1.6% year-on-year in seasonally- and calendar-adjusted terms, moderating from April’s revised 2.1% rise (previously reported: +1.9% year-on-year).
July 4, 2018
Largely reflecting an improvement of business conditions in the services sector, the IHS Markit composite Purchasing Managers’ Index (PMI) edged down from 55.9 in May to 54.8 in June.
June 29, 2018
Spain’s current account balance recorded a deficit in April, the largest since February 2015.
June 28, 2018
The Spanish Board of Architects (Colegio de Arquitectos Técnicos) granted 7,106 new construction permits in April, according to data published by the Ministry of Public Works (Ministerio de Fomento).
June 28, 2018
Retail sales declined 0.4% in year-on-year terms in May, contrasting the 0.7% increase recorded in April and marking the lowest reading in seven months.