Spain’s GDP grew 3.2% year-on-year in the third quarter, easing from the 3.4% registered in the previous one. But consumption slowed on a year-on-year basis from 3.2% to 2.8%, while gross fixed capital formation also showed a significant deceleration from 3.6% to 3.1% in the third quarter from a year earlier.
Rajoy’s minority government will face the first big challenge of its new term in office with the presentation of the 2017 State Budget. This could be a good opportunity to start from scratch and implement much needed reforms.
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.
From its pre-crisis maximum level, the real value of salaries has fallen 43 billion euros, mainly in the construction sector. On the other hand, in the services sector they have risen by some 5 billion euros. Since the start of the economic recovery, wages have increased below productivity rates. This has been particularly noticeable in the manufacturing sector.
Energy sector analysts have received Spain’s new Energy Minister with a sense of satisfaction, pointing out that most of the electricity reform has been implemented, although there are a few aspects still to be regulated. This is too simple a version coming from a sector accustomed to having a low profile. And one which, despite the latest modifications, charges Spaniards one of the most expensive electricity tariffs in Europe, according to Eurostat.
There is a lot of talk at the moment about Spanish pensions. But, it would appear, not enough. At least it is by no means clear that public opinion and voters are very aware of what is about to land on top of them: that in 2017 the pension piggy bank will be empty. And what will happen then?
Spanish companies like Santander, Zara, Freixenet, ACS, Repsol, Roca, Iberdrola, Abertis, Telefónica, Melia or Ferrovial, to mention only a very few, are the companies which are behind this internationalisation of our country’s economy. Over the last few years, they have given a considerable boost to the Spanish economy’s presence across the globe.
Spain’s competitiveness increased in the third quarter compared to other eurozone and OECD countries, with consumer prices indices as a reference, according to the Competitive Trend Index compiled by the Ministry of Economy, Industry and Competitiveness.
Spain’s Committee for Competitiveness in Business has had zero influence over this year when the country has been without a government. Set up in 2011 by the heads of the 15 biggest Spanish companies, its aim was to boost the economic recovery and strengthen international investor confidence.
The Bank of Spain’s (BoS) Financial Stability Report usually puts its finger on the problem when it highlights the main risks affecting the banking business. As well as low interest rates and the deterioriation in both Spanish and global economic prospects, the BoS’ latest report points to another factor which has not warranted so much attention: the decline in the prices of financial assets, both in fixed income securities and equities.