Unemployment and weak economy damage consumer confidence in Spain
Successive negative statistics regarding the Spanish economy has caused consumer confidence to fall to its lowest level at 70.9 points.
The index for consumer confidence, created by the Official Credit Institute (ICC-ICO) in 2004, fell by 1.4 points in January which makes it the 8th consecutive month in which consumer confidence has fallen. It began to weaken last June at the beginning of the financial crisis in the US.
Aurelio Martínez, the president of the ICO said that there were several factors which affected consumer confidence such as the reduction in GDP, rising levels of unemployment, increasing petrol prices, inflation, increasing household costs and massive falls in the stock market together with external factors such as the financial crisis in the US caused by ‘subprime’ mortgages.
Nevertheless, Martínez also highlighted the fact that the latest figures on consumer confidence could have been directly affected by the collapse of the stock market on the days that the last survey was carried out (18th – 22nd January).
However, Martínez said that he expected the situation to improve from April onwards and criticised those who classified the present economic situation as an ‘acute crisis’. He went on to say that the Spanish economy was growing above 3% according to figures from Europa Press.
The survey discovered that consumers had reduced confidence in inflation in January which placed the indicator on the evolution of prices at its lowest level for the second consecutive month since the creation of the index. Consumer confidence in durable consumer goods and savings were also reduced.
The ICO also put the reduction of consumer confidence in January down to the increase in uncertainty and volatility in the international financial markets associated with the deceleration in the growth of the US economy and the worldwide consequences of this.
The ICO complies the monthly indicator of consumer confidence using a survey which finds out the opinion of a thousand consumers from all over the Peninsula. The survey asks them about their current household costs, their opinion on the Spanish economy and employment with respect to the previous six months as well as their expectations for the next six months.