Friday, October 31, 2008
The Spanish economy is progressing inevitably towards recession
• The GDP fell by 0.2% in the third quarter and the Bank of Spain expects further declines • The financial crisis sinking confidence, accelerates the fall in consumption and employment pushed to the bottom If you want to see the chart in PDF click on the image. MORE INFORMATION The Spanish trade deficit rises P. ALLENDESALAZAR / MADRID M. JIMENEZ BOTI / BARCELONA Spain has already given the first step toward recession. The Bank of Spain announced yesterday that gross domestic product (GDP) fell by 0.2% between July and September for the second quarter. The key is that the financial debacle has accelerated the decline in domestic demand, already seriously affected by the collapse of real estate. If the fall is repeated in the final quarter, the recession - technically defined as two consecutive quarter of falling intertrimestrial of the economy - will be a fact for the first time in 15 years. The worst thing is that almost all indicators suggest that it will. Unlike the United Kingdom, Germany, France and Italy, the Spanish economy achieved a slight growth in the second quarter (0.1% intertrimestrial) thanks to the drag effect of the strong expansion in recent years. But that momentum is almost exhausted. The growth rate has fallen from 2.6% in the first quarter to 1.8% in the second and 0.9% in the third. The completion of the outstanding real estate developments, the collapse of confidence by the financial crisis and poor economic forecasts, and the fall in disposable income for the rising unemployment have pushed the consumer - mainstay of the economy - to a spiral negative. In the third quarter barely rebounded 0.3%, compared with 2.7% in the first and 1.4% in the second. THINGS SECURE "We are no longer spared no one from the recession. The question is how will the recovery: in UVE in uo in elementary?", Was questioned Catasús Joaquin, an analyst macroeconomic Abantos. The expert stressed that the high weight of the real estate sector in the Spanish economy, we inevitably led to a period of contraction in growth once the bubble bursting, as has happened. The financial crisis has deteriorated further growth expectations. "We deserve a recession by our own excesses. We have almost the same mistakes committed in the U.S.," footnote. The Bank of Spain also maintains that the "extreme episodes of financial instability" that followed the fall of Lehman Brothers in mid-September have accelerated the collapse of the economy. On the one hand, have collapsed confidence of households and businesses to historic lows, and on the other hand, has caused a "new hardening" in their access to credit, which joined the collapse of the stock market and housing prices has had a negative impact on disposable income and wealth of households and companies. The only positive note is that external demand contributed 0.6 points to growth, twice that in the previous quarter, though most by falling imports from the rise in exports. Also at this point there are shadows on the horizon as the crisis is getting to the emerging countries. "The world economy faces the next few quarters in an environment of maximum uncertainty and exacerbate the risk that the bearish phase of the cycle is more pronounced and lasting," warns the institution. The recovery in the course of 2009, he says, will largely depend on the outcome of the special plans of European countries, but the process will be "long and complex." The Bank of Spain said that the international forecasts predict that the improvement will not occur until the second half of 2009, but apostille that there is a risk that is delayed by feedback from the financial and economic deterioration. As a remedy, is again asking for more flexibility in the labor market and containment of wages.