The Government will review on Friday upward activity and employment forecasts for the Spanish economy for this year and next. However, as they get to know more details of the behavior of the indicators in the third quarter, this review could be more timid than originally planned.
According to various sources, the Executive planned to raise the GDP this year from 1.2% to 1.5% and 1.8% in 2015 to 2%.
But the final review could be closer to 1.3%, at least for this year, which is what most of the estimated 17 major services firms in the country gathered by the Foundation of Savings Banks (Func). This would be just one tenth more than forecast by the Ministry of Economy in the beginning and less than recalculated in August by the minister of Economy, Luis de Guindos, who said the Spanish growth would be closer to 1.5% this year and 2% next year.
But this morning came warnings of slowing activity from the Bank of Spain and from the government itself. Thus, the Industry Minister Jose Manuel Soria, recognized in the halls of the House of Representatives that the GDP growth in the third quarter “is not doing” as the previous period, when the economy grew by 0.6% between April and June compared to the first quarter.
The Bank of Spain, meanwhile, warned in its latest economic bulletin that the information available to their technicians indicate “a somewhat less expansionary demand Private “. This was noted in both the confidence of families-households sentiment indicators and retailers were placed in July and August in the second quarter- lower levels, and consumption.
In fact According to this report the monetary authority, registrations of private cars has continued over the year third quarter slowdown in recent months. And large companies have increased sales by 0.7% in July, one tenth less than in June. Also, the rate of retail trade recorded a monthly fall of 0.2% that month, placing the annual rate in negative territory, down 0.5% compared with the same month last year.
But this cooling has also been felt in the investment. Thus, the Bank of Spain highlights “some moderation strongly expansionary trend” investment in equipment in the third quarter compared to previous quarters. While the latest data from construction investment “also point to a possible slowdown in growth” between July and September.
Also, this document certifies “some moderation” in both Spanish industrial activity as the creation employment in July and August.
All these warnings from the Bank of Spain justify Func experts consider that the Spanish economy will not hold the entire pulse in the third quarter and will grow two tenths less than the second, with an increase of 0.4% PIBdel, according to the average consensus of these 17 studies services. And this development will experience sustained mainly by the service sector “boosted by the strength shown by tourists during the summer season, says the Bank of Spain. In July, tourist arrivals grew by 5.9% yoy and nominal total expenditure, 4.5% in that month.
But in general the expected slowdown in the economy is directly related, according to experts, with the slowdown in activity in the euro area and, specifically, its main engines and Spanish partners: France, Germany and Italy. In fact, Spanish exports have been slowing in recent months, so until July grew 1.6% compared to 5% expected by the Government for 2014.
The setback comes Exterior
France -Destination main Spanish exports, with 17% of these sales just to externally certify its second consecutive quarter of zero growth. And the PMI data developed private sector activity known point to an extension of this stagnation also in the third quarter, according to experts.
In Germany, after experiencing a contraction in GDP in the second quarter (-0.2% compared to the first quarter) for a slowdown in exports and investment, the prospects are not promising.
Just this morning it was revealed that business confidence fell in September to force in Germany, again more than expected, because the German cyclical engine slows down and just pulses exports are expected. This was said by the Institute of German Economic Research (Ifo) which revealed that business confidence index in Germany as a whole fell in September for the fifth consecutive month to 104.7 points, the lowest level since April 2013, from 106 , August 3 points.
The Government has admitted that the setback from abroad has begun to affect the Spanish economy for its “high exposure” to the major economies of the euro zone, according to Soria. While the Minister of Industry said yesterday that the reforms implemented in Spain make “is in the best position to deal with the new situation.”
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