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The Spanish economy starts its downturn

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The Spanish economy starts its downturn

Funcas and AIReF slash ir forecasts for this year

"private consumption has started to lose dynamism," notes Foundation of Savings banks.

The second half of this year is marking beginning of dreaded slowdown of Spanish economy. The Gross domestic Product (GDP) keeps an intense pace of growth is enviable for major european economies but is losing strength. The moderation in private consumption and review of data of National Statistics Institute (INE) get worse fact with it will close 2017, after 10 years of crisis.

The Foundation of Savings banks (Funcas), one of references in prediction of situation, has decided to downgrade to a tenth its forecast for this year breaking upward trend since beginning of year and bet that it will grow 3.1%, below previous years.

The Spanish GDP grew by 2015, 3.4% and, in 2016, 3.3%, according to revised data announced yesterday by INE. Therefore, year 2017 is shaping up as best since start of crisis with old data happens to be one that most clearly marks slowing down

"The slowdown of Spanish economy, provided from second half of 2017, begins to be perceived, which has led to Funcas down one-tenth expected growth of GDP for whole year, up 3.1%", affirms this association in a press note.

"Although process of recovery continues, private consumption has started to lose dynamism result of lower purchasing power of wage income. While, picks up public consumption, due to increase in procurement of public administrations, and maintains strength of investment, particularly in housing construction," he says.

For its part, Independent Authority for Fiscal Responsibility (AIReF) has also downgraded its forecasts, and no longer believes that growth in this third and fourth quarter is going to be of near to 0.9% as up to now, but that limits you to 0.77% until October and 0.7% in last quarter after bad data of employment of August.

According to Funcas, "in 2018, year in which will confirm slowdown, economy will grow by 2.7% (compared to 2.8% previously expected) por lesser dynamism of national demand". Your prediction is that "families will adjust ir expenditure decisions, which will affect private consumption and stop fall of savings rate. Public consumption is also expected to decelerate with aim of reducing public deficit. The external sector will maintain its strength, although it will weaken slightly".

The minister of Economy, Luis de Guindos, said Tuesday in Burgos que will revise upwards growth forecast for this year up to now been set at 3%. However, no longer insisted that it will overtake in 2016 as in previous interventions.

The INE has located value of GDP in 1.118.522 million euros, highest of historical series, and has justified upward revision by a greater weight of investment in 2015 and exports in 2016. De Guindos called "good news" this review, because it reflects a major recovery in recent years


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