Funcas | The number of doctors per 100,000 inhabitants (388) is higher than in the Netherlands (358), France (316) and the UK (281). But it falls well short of Germany (425), which also has almost 2.5 times more hospital beds per 100,000 inhabitants than Spain.
Bankinter | The rating agency justifies its decision on financial and external resilience, strong GDP growth in recent years and structural reforms. It also considers that the recent deficit reduction gives some confidence that, once the COVID-19 crisis is overcome, public debt will maintain a downward trend. It estimates GDP will see a decline of 9.6% this year and will grow 4.4% in 2021.
On Tuesday, the Treasury launched its first 20-year syndicated bond for a minimum amount of 10 billion euros, with demand reaching 78 billion. So it continues to advance in its programme of issues for 2020. This is the third time during the pandemic that the Treasury has made a syndicated issue. On March 24th it made a syndicated placement for 10 billion euros with a 7-year bond, and another on April 22nd for 15 billion with a 10-year syndicated bond.
Feel Capital | Until September, the government will have pay out over €39.4 billion euros in benefits to the more than 9.8 million pensioners in Spain, as well as to people claiming widowhood, permanent disability, orphanhood and family favour benefits. As a result, it will be forced to take extraordinary measures this summer after the emptying of the pensions’ piggy bank.
The number of unemployed in Spain increased by 26,573 people in May, compared to 282,900 the previous month and -84,075 in May 2019. This is the worst May figure in recent years, but it is a vast improvement on previous months (up 282,000 in April and up 302,265 in March).This may be enough to raise some optimism in the Spanish labour market. The labour market data for May also reflects an increase of 97,462 people registered with Social Security compared to the previous month.
Last Friday, the Government approved the minimum living wage, which will guarantee an income of between 461 and 1,015 euros for 850,000 Spanish households. The measure aims to reduce extreme poverty in the country by 80%. The government had planned to promote this measure during its legislature. But faced with the serious economic emergency resulting from the pandemic, it has decided to bring it forward.
Scope Ratings | A series of debtor-friendly national and regional decrees introduced before the pandemic was already weighing on investor sentiment. But the sharp economic downturn has exacerbated uncertainties that were building up and will depress recovery rates on NPL portfolios even further.
The automotive sector was already in a difficult situation before COVID-19. The Spanish market is not escaping this crisis and has already seen its first victim with the announcement of the Nissan plants’ closure in Barcelona. The closure, which is expected to take place in December, will cut around 3,000 direct jobs at the plant and an additional 20,000 indirect jobs. The sector represents 10% of Spanish GDP and the three Catalan factories produce 1 in 5 vehicles assembled in Spain.
Link Securities | According to preliminary data from the Spanish National Institute of Statistics (INE), the Consumer Price Index (CPI) fell to -1% year-on-year in May (-0.7% in April). The drop reflected the decline in fuel and oil prices, while food prices continued to rise. May inflation has not seen a decline to -1% since 2016. We do not rule out that the entire Eurozone could end up heading into deflation over the coming months, at least those economies most penalized by the pandemic.
Bankia Estudios | As expected, the improvement in the external sector observed in the first two months of the year did not continue in March. The Covid-19 crisis hit both exports and imports hard, with setbacks of more than 14% year-on-year: only trade in chemical products, mainly medicines, and food was exempt from the contraction. The Q1’20 accumulated drop in Spanish exports (3%) is similar to the one noted in the EMU (3.2%) and Germany (3.3%), but much lower than that in France (8.6%).