The Spanish economy at a glance

Círculo de Empresarios | In August, Spain recorded the third largest economic slowdown among OECD countries, after Ireland and Slovenia. Specifically, the Composite LeadingIndicator (CLI) decreased by 0.22 points to 98.58 and has been below 100 points 1for 12 months now. In turn, the rate at which the Spanish economy is slowing down has doubled that of the Eurozone average (-0.1 points to stand at 98.96). In this context, Funcas has reduced the annual growth forecasts of the Spanish GDP down to 1.9% in 2019 and 1.5% in 2020 (-0.3 and -0.5 pp, respectively), mainly due to the lower dynamism of domestic demand and the INE’s revision of the historical series of GDP. Currently, the national growth forecasts for this year are in the range between 1.9% and 2.2% per year. In this scenario, it is forecasted that the public deficit at 2019 year-end will be around 2.5%, 0.5 pp higher than the objective sent to the European Commission by the government in power, which means that one more year has been lost in terms of fiscal consolidation.

Tourism 

Between January and August, the arrival of international tourists to Spain increased by 1.5% year-on-year, reaching 58.2 million visitors, compared with the stagnation of the same period of 2018 (-0.02%). By countries, the United Kingdom (21.7% of the total), France (14%) and Germany (13.3%) remain the main tourist sending countries. As for tourism spending, it increased by 3.2% year-on-year, 0.6 pp more than in the same period of the previous year, reaching€64.1 billion (5.3% of GDP), although the average spending per tourist experienced a moderate growth of1.7% year-on-year (€ 1,102 per tourist), which is 0.9 pp lower than that recorded between January and August 2018.

Industry

In August, for the fifth consecutive month, the Industrial Production Index (IPI) recorded a new year-on-year increase of 1.7%, the third largest of the year. However, this increase is 1.2 pp below the annual average registered between 2015 and 2017, which confirms the lower dynamism of the sector since 2018 due to the weakening of European industry, especially the German industry, and the lower growth in the exports of Spanish goods.