As the Spanish economic cycle enters the maturity phase, doubts emerge about its ability to maintain balanced growth in the medium term. In this respect, the capacity for financing abroad has contracted in annual terms to 2015 lows, points Bankia Estudios, in the process undermining the process of deleveraging when global indebtedness still remains at excessive levels. Furthermore, according to the firm, the fall in the financing capacity in Q318 reflects, principally, the lower savings generated by companies and households, in a context of growing dynamism in private investment.
In the case of households, even if disposable income has seen a big increase as a result of the recovery in wages, the greater rhythm in consumption has led to a new fall in savings.
As for companies, the reduced capacity for financing is due to, for the first time since 2014, a fall in disposable incoming, resulting, above all, from the higher wages they are paying.
The Spanish economy generated a financing capacity in Q318 of 3.427 billion € (1.2% of quarterly GDP), less than half that of a year before (7.403 billion €, equivalent to 2.6% of GDP) and the worst registered in a third quarter since 2011. In accumulated terms over four quarters, the financing capacity is 17.645 billion €, the lowest since Q115 (1.5% of GDP compared to 2.2% in the whole of 2017).
The financial position of households has reverted to levels of 10 years ago
Following the slowdown in the previous quarter, household gross disposable income grew 3.8% yoy in Q318, an increase unknown for four years. For Bankia Estudios, this is explained, above all, by the performance of wages (+4.7%, the greatest increase since Q116), to which must be added the recovery in net incomes from property (+5.3% compared to -1.7% the previous quarter) and the slowdown in the payment of direct taxes (two points to +9%).
Among the incomes from property, both interest received and, especially, interest paid reduced (-10.4% and -21.8% respectively).
Household spending on final consumption (nominal) grew above the levels of gross disposable income since the middle of 2015; in concrete, 4.4% in Q318, six decimal points above the previous quarter. As a result, savings were negative: -2.02 billion € (-1.138 billion € a year before), which means the worst third quarter in the historic series. In annual terms, savings have fallen to 34.3 billion €, a new historic low (4.7% of gross disposable income compared to 5.5% in the whole of 2017).
If you add to this negative net capital transfers (-543 million €) and investment which continues growing at double digit rates (+16.7% to 13.70 billion €), households registered the greatest financing needs in a third quarter since 2007: 16.2 billion €, 20.2% higher than the same period of the year before. In annual terms a growing need for financing has been registered since the end of 2017: 14.3 billion € (-1.2% of GDP, compared to -0.4% in 2017): you have to go back to 2008 to find a larger negative balance.