Spanish consumers gaining confidence as consumption in Spanish households increases for the first time in two years
According to the latest figures published by the Spanish National Institute of Statistics (INE) Spanish households have started to consume more. Consumption by Spanish households had been decreasing continuously since the beginning of the financial crisis at the end of 2007. However, in the last quarter of 2009 consumption went up by 0.3%. Nevertheless Spain did not come out of recession in the last quarter of 2009. The economy shrank by 0.1% in the last quarter of 2009 and by 3.1% compared to the same period for 2008.
The INE also confirmed that figures for the economy last year were the worst for four decades with a fall of 3.6%. Employment also fell by 6.7% – the equivalent to the loss of 1,271,000 full time jobs.
However, figures published by INE show that although the Spanish economy has not started to pick up yet the components that make up GDP have started to improve.
The Secretary of State for the Economy, José Manuel Campa, forecast that the in first quarter of 2010 the Spanish economy would experience ‘slight sustained improvements’ and that private consumption, investment and exports would ‘progressively consolidate’. Campa also said that ‘the government did not expect a relapse in the economy despite the withdrawal of economic stimulus because private activity would take over from public spending’.
However, the Bank of Spain’s last report advised caution, claiming it was necessary to wait and see what effect the withdrawal of certain economic stimulus would have on figures for the economy, especially the ending of the scheme that gave discounts to people buying news cars.
The figures published by INE for the whole of 2009 year clearly demonstrate that it was one of the worst years for the Spanish economy in many decades – GDP fell by 3.
6% and consumption and investment in the economy both fell by 6.4 points. Overall household spending went down by 5% in 2009 and investment fell by 15.3%. Investment in the construction industry fell by 11.2% which is less than the fall in investment in capital goods fell which by 23.1% last year.