Yann Le Pallec, global head of ratings at S&P Global Rating (S&P), says that the ratings agency will upgrade Spain this month if current trends are maintained. The executive said that Spain’s current rating is A- with a positive perspective, which implies that if certain conditions are fulfilled there will be a rise in credit rating.
According to FEDEA, the total expenditure on R&D grew 6% compared to 2016. Companies increased their expenditure on R&D by 8% and the public sector slightly more than 2%. These growth rates recall those of the years before the crisis but are still not sufficient for Spain to escape the small group of European countries who still have not recovered pre-crisis levels of R&D spending.
In 2018, 22.3 M employment contracts were signed in Spain. This record number marks a sixth year of sustained increases, as well as a significant rise over the 17.8 M contracts signed in 2007. Despite the fact that 21% more contracts were signed compared to before the financial crisis, the number of people with Social Security stood at 19 M at the end of 2018, a level very similar to that of 2007 (19.4 million). Analysts at Caixabank Research explains next what is the reason for this contrast.
One of the candidates to replace Merkel proposed fiscally incentivising investment in stocks, as a complement to the public pension. The idea got little support in a country with a savings rate of 10% but an enormous aversion to risk, where variable income seems reserved for the highest income.
Growth in Spain remains strong but the country can withstand some political instability before the results of snap elections that will be held on 28 April. As reported by analysts at Julius Baer, “polls are indicating a hung parliament, but shifts in party policies could enable both a centre-left and a centre-right coalition government to be formed.” The spread difference between Portugal’s and Spain’s 10-year government bonds currently stands at 30 basis points.
According to data published by the Bank of Spain, the debt accumulated by all Spanish Public Administrations during 2018 increased by 26.536 billion euros, an increase of 2.3%, to reach a total of 1,170.961 billion euros by the end of the year, a new record in absolute terms. In relevant terms, however, the debt fell because the Spanish economy continues to grow.
According to data of the International Labour Organisation (ILO), which links the increase in poverty to the length of contracts, in a comparison of 18 European countries, Spain has registered the largest proportion of contracts of 6 months or less. According to its forecasts, Spain’s unemployment rate will fall from 15.5% in 2018 to 14% in 2020.
Spanish PM Pedro Sánchez called snap elections for April 28th after holding an extraordinary cabinet meeting in Madrid. The ballot follows Sanchez’s defeat in parliament over his 2019 fiscal plans. Madrid avoids May 26 “Super Sunday,” with local, regional and EU elections the same day.
On Tuesday Banco Santander announced that it will not exercise the repurchase of its contingent convertible bonds (CoCos) – the AT1 – of 1.5 billion euros and coupon of 6.25%. The bank, which referred to financial reasons, had already warned in its presentation of results that it would only make the call if conditions were adequate.
Red Eléctrica, the company which manages Spain’s high tension electricity cables, has agreed to buy 89.68% of Hispasat, the largest operator of satellite infrastructure by volume in Spain and Portugal, for 949 M€ from Abertis Infraestructuras. REE had already tried to buy Hispasat at the beginning of last year, even reaching a pre-agreement with Abertis. But the deal was frustrated by the corporate operations in Abertis and the disagreement of the previous government.