J.L. M. Campuzano (Spanish Banking Association) | The Spanish economy’s deleveraging process is still ongoing. But the data for Q3 shows different trends in financing capacity depending on the sector.
Since the beginning of 2014, the Spanish economy has been recovering from a very tough crisis – unemployment jumped from 8% in 2008 to 26% at the start of 2014 and has now fallen to 18.9%. This is in part thanks to the ECB’s extremely expansionary monetary policy and low interest rates. Now after Donald Trump’s victory, everything could become unstable.
The PSOE “barons” rebellion against party leader Pedro Sanchez represents an internal power struggle. A national issue. Sanchez has been replaced by an interim executive committe headed by Javier Fernandez. Sanchez had a strategy worked out.
Spain’s caretaker Prime Minister Mariano Rajoy will this afternoon make his investiture speech to parliament, ahead of a key vote on Wednesday to secure support for his conservative Popular Party to form a new government. The PP have already brokered an agreement for breaking the current political deadlock with centre-right party Ciudadanos, led by Catalonian lawyer Alber Rivera. As a result, Rajoy can probably rely on the support of 170 MPs. But he needs 176 votes (out of a total of 350) if the PP is to win an absolute majority.
In the next quarter and the following one, we will obviously see an uptick in growth because of the tourist season. But after that, we will see a more marked slowdown, for a variety of reasons, with the first one being the impact of Brexit. But if this is going to lead to recession, I don’t know. I don’t have a crystal ball, but I don’t rule it out.
The government has raised its deficit forecast for this year to 3.6%, thus failing to comply with the objective agreed with the European Commission (2.8%). But Guindos is confident that the Spanish economy will be able to apply an adjustment equivalent to 1.4 percentage points of GDP, over 14 billion euros. But the experts do not believe that the economy can deal with such a large adjustment.
The Spanish economy is in the “champions league” in terms of GDP growth, but has failed the deficit, unemployment and debt exams. The autumn forecasts from the European Commission raised the deficit non-compliance to 4.7% of GDP for this year and 3.6% for 2016, well off the levels of 4.2% and 2.8%, respectively, previously agreed with Brussels.
Car production in Spain rose 26.7% in September, as the country’s automotive plants assembled about 9,000 vehicles per day, their highest production level since April 2008.
Fernando Barciela | Spain has some abilities, which were inconceivable three decades ago. A position which has been achieved through our companies’ hard work,” says Regino Moranchel, former CEO of Indra, the leading Spanish technological company and one of the four most important European companies by stock market capitalisation.
Spanish public administration debt fell by €12.7 billion in July to €1.040 trillion