Spain Economic Outlook
April 30, 2019The 28 April general election yielded a more fragmented parliament amid the breakthrough of the far-right Vox party. Moreover, in line with what opinion polls had anticipated, the Socialist Party (PSOE) won the largest number of seats in Congress, setting the stage for Prime Minister Pedro Sánchez to build a governing coalition. The results suggest that this will take the form of a left-of-center alliance comprised of PSOE, left-wing Unidas Podemos and a number of smaller, regional parties. Coalition talks are set to be long and difficult, however, especially if Catalan separatist parties are to play any role in the partnership. That said, heightened political uncertainty stemming from any protracted period of negotiations is unlikely to meaningfully impact the near-term economic outlook, as fundamentals remain sound. Despite Q4 2018 growth having been revised down, the election falls against the backdrop of still-solid economic activity; retail sales quickened in February which, combined with healthy job creation and improved consumer sentiment through March, point to upbeat household spending in Q1.
Spain Economic GrowthGrowth is seen slowing somewhat this year amid the maturing business cycle. Domestic demand should continue buttressing overall activity, particularly private consumption amid continued, albeit slowing, employment growth and gradually rising real wages. Tourism, which has passed its peak, and political uncertainty remain key downside risks to the outlook. Met the why particular panelists project growth of 2.2% in 2019, which is unchanged from last month’s forecast, and 1.8% in 2020.
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|Bond Yield||0.97||5.62 %||May 11|
|Exchange Rate||1.12||0.65 %||May 13|
|Stock Market||9,047||-0.74 %||May 13|
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Spain Economic News
May 9, 2019
Industrial production fell 3.1% year-on-year in seasonally- and calendar-adjusted terms in March, following February’s revised 0.2% decline (previously reported: -0.3% year-on-year).
May 6, 2019
Largely reflecting slower activity growth in the services sector, the IHS Markit composite Purchasing Managers’ Index (PMI) dipped to a seven-month low of 52.9 in April from 55.4 in March.
April 30, 2019
According to data published by the Ministry of Public Works, the Spanish Board of Architects approved 9,168 new construction permits in February.
April 30, 2019
Retail sales rose 0.3% in year-on-year terms in March, following the 1.7% upturn logged in February.
April 30, 2019
Spain’s current account balance recorded a deficit of EUR 2.8 billion in February, greater than both the EUR 1.8 billion shortfall recorded in February 2018 and the EUR 1.5 billion deficit logged in January.