Despite the rhythm of Spain´s export of goods and services over the last five years – which have increased more tan ten percentage points over GDP, rising from only 22.7% in 2012 to 34.1% last year – Spain still finds itself 12 points below the EU average of 46%.
From 2019 it is possible that Spain will have difficulties financing its public debt, which is definitely not only the official figure of 98.3% of GDP. Rajoy’s increase of this debt by €649 billion has been financed at very low interest rates, thanks to the ECB’s quantitative easing. On the other hand, Pedro Sánchez has announced substantial spending increases, which will inevitably increase debt in 2019.
The Government of Pedro Sánchez has admitted that Spain will not meet the fiscal deficit targets set by the previous government of Mariano Rajoy. The new targets are -2.7% for 2018 (as opposed to -2.2% before) and -1.8% for 2019 (as opposed to -1.3%).
Rafael Domenech (BBVA Research) | Since 2014, Spain has been growing at rates higher than those of most other European countries. During these years, Spain has recovered the competitiveness lost before the crisis.
In June 2018 the European Union agreed a 32% EU renewable energy target for 2030.Several member states tried to push for an even higher target of 35%. Spain was among them.
Raimundo Poveda | Spanish banks must find somewhere to invest. Their retail credit, for now with a low level bad debts, has been growing at an accelerated rhythm for the last couple of years. But that is where the good news ends. Credit for house purchases, by far the most important component in household credit, and in all private sector credit, continues to fall (2.5% in 2017).
According to the estimates of BBVA Research, social security enrollment increased 0.8% in second quarter , and unemployment reduced 1.6%.
Now “the waters appear to have calmed” in Italy, analysts at Intermoney, however, believe we will see more episodes of tension originating in Italy. The key moment is likely to come at the end of the summer or in the autumn. This situation should be seen as a scenario for tension rather than rupture, although contagion to other peripheral economies could be possible.
Raimundo Poveda | Strong increases in Madrid, Barcelona and other cities (of the order of 7% in prices and apparently more in rents) coincide with stagnation in the rest of the country, and even falls in five autonomous communities. Also, the 45,000 transactions per month last year still pale in to the 75,000 per month of 2004-2007. It makes no sense to talk about a bubble.
Bankia Estudios | For a second successive year, the arrival of immigrants has invigorated the Spanish population, otherwise stuck in organic stagnation. Although the increase is modest, in the end it is hopeful as it means an intensification of the rhythm identified in 2016 (0.2%).