Spanish borrowers will have more difficulty paying their consumer loans, according to Moodys

Spain services PMI

Link Securities | According to Moody’s credit rating agency, the sharp decline in consumer confidence in Spain during 2H19 reflects the growing concerns of Spaniards about the economy and employment.

Moody’s expects an increase in borrowers’ difficulties in coping with the return of their consumer loans as a result of the expected moderation of the growth of the Spanish economy – it believes that consumer confidence data represent an advanced indicator of the increase in the risk of assets and the consequent deterioration of the evolution of securitized loans. Moody’s now expects Spanish GDP to grow 1.8% in 2020, compared to the 3% average between 2016 and 2017.

Last week the Center for Sociological Research (CIS) reported that the Spanish consumer confidence index had declined in December to 77.7 points, 13 points below the previous year’s reading and to its lowest level since 2013.

According to the European Commission, the confidence of Spanish consumers deteriorated in December for the third consecutive month, up to -12.1 points, compared to -10.3 the previous month, its lowest record since November 2014.