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2021 Spain’s budgetary plan and the pathway for an economic recovery.

2021 Spain’s budgetary plan and the pathway for an economic recovery.

  • Por José María Romero Vera
  • 21st of October 2020

The analysis of the 2021 Budgetary Plan sent to Brussels by the Spanish Government leads us to affirm that public income will hardly reach the expected increase next year. In addition, by not insisting on the necessary search for the efficiency in public spending, everything indicates that public deficits for 2020 and 2021 will be higher than official forecasts. However, it is through the achievement of solid macroeconomic and budgetary fundamentals, opening up to the outside world and undertaking structural reforms, that the Spanish economy will overcome the current crisis, as it has done so on previous occasions.

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Outlook for Spain in Covid-19 times: the need to establish the basis for an economic recovery.

Outlook for Spain in Covid-19 times: the need to establish the basis for an economic recovery.

  • Por José María Romero Vera, Andrea Cordero López y Andrea Rodríguez Nieto.
  • 17th of September 2020

The world economy continues to tackle the severe crisis caused by Covid-19. The pandemic has plummeted the Spanish economy harder than the rest of its European partners. The recovery of activity in the weeks following the end of the confinement has not shown the expected drive during the summer. Against this backdrop, Equipo Económico (Ee) has revised its GDP forecast for this year two points downwards, when the drop in GDP will reach -12.0%. The degree of success and effectiveness of economic policy will very much determine the strength of the recovery.

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The air business sector: landing and take-off?

The air business sector: landing and take-off?

  • Por Marina Marcos Cava y Javier Colino de Gonzalo
  • 21st of July 2020

After the sharp deterioration that the sector has suffered during the months of the state of alarm, with air transport in Spain registering a decrease of over 80%, flights and passenger traffic have been reactivated from the beginning of June, although reaching levels still much lower than in 2019.

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Setting up the Corporate Tax.

Setting up the Corporate Tax.

  • Por Manuel de Vicente-Tutor R.
  • 14th of July 2020

The months of June and July are usually used by drivers to prepare their vehicles for summer journeys. July is the Corporate Tax´s month, as the vast majority of companies file their returns in this month. This month of July has seen a major ruling by the Constitutional Court, which may have more consequences than those initially derived from the declaration of unconstitutionality it contains. For all these reasons, and in the same way that we are paying attention to our car, I believe that the time has come to stop and carry out a small review of the state of our Corporation Tax. Let's take step by step.

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Economic forecasts for 2021 are a reference, yet to be built.

Economic forecasts for 2021 are a reference, yet to be built.

  • Por José María Romero Vera. Marta Otero Moreno. Andrea Cordero López.
  • 9th of July 2020

At Equipo Economico we maintain, at the moment, our estimated contraction of the Spanish GDP of, at least, 10% in 2020. In 2021, the economy pickup would allow it to grow at 7.2%, although this will be insufficient to reach previous annual levels of growth and employment. The implementation of an adequate economic policy is urgent to overcome the challenges posed by the depth of the crisis in Spain and strengthen recovery.

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Crisis and transformation in the real estate sector

Crisis and transformation in the real estate sector

  • Por Marta Otero Moreno y Andrea Cordero López
  • 2nd of June 2020

The real estate sector is proving to be one of the most affected by the Covid-19 crisis in Spain. The framework of uncertainty around the virus, together with poor economic prospects and the impact on the labor market are delaying investment decisions. All of the above forecast that the diminishing demand for residential housing will continue in the coming months. On the other hand, the medical origin of this crisis, as well as its exceptional nature, could be causing a change in the tastes and preferences of consumers, who now place a higher value in space and light, to the detriment of location.

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Impact of Covid-19 and outlook for the Spanish economy.

Impact of Covid-19 and outlook for the Spanish economy.

  • Por José María Romero Vera
  • 17th of April 2020

The world economy is being strongly affected by the impact of the Covid-19 pandemic. The necessary search for the containment of the progression of the disease has led to a general disruption of the economic activity, including Spain. In this context, we expect the contraction of Spanish GDP to reach 10% in 2020. The impact of the crisis will be heterogeneous at the sectorial level. In order to recover from this crisis, the needs of the productive network must be considered with the utmost care, since they represent the main generator of employment.

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Labour gibberish: ERTES, ERES, paid leave...

Labour gibberish: ERTES, ERES, paid leave...

  • Por Manuel De Vicente-Tutor
  • 30th of March 2020

We have been homebound due to the declaration of the state of alarm since March 14th, which entails restrictions on the rights and guarantees laid down in the, mainly with regard the freedom of movement.

This situation is duly proportionate to the significant public health risks that have resulted from the COVID-19 pandemic. And, for this reason, it has been assumed with calm and resignation by the citizens, who are setting an example of solidarity and civility.

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Inconsistent government resistance to the extension of the tax returns filing deadlines.

Inconsistent government resistance to the extension of the tax returns filing deadlines.

  • Por Salvador Ruiz Gallud
  • 23rd of March 2020

We are currently suffering from a historical health crisis with very important economic repercussions. On Friday the Governor of the Bank of Spain referred to this situation as an "unprecedented disturbance". It is therefore necessary and pressing to adopt public policies that, initially, mitigate the impact, and later allow the economy to be restarted as soon as possible.

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Labor flexibility and employment creation

Labor flexibility and employment creation

  • Por Francisco Piedras Camacho
  • 28th of January 2020

Since the 2012 labor reform, the Spanish business environment has been better adapted to market needs and technological changes, with a positive net effect on the level of employment.

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Will Spanish growth stabilize at 1.5% in the coming years?

Will Spanish growth stabilize at 1.5% in the coming years?

  • Por José María Romero & Andrea Cordero
  • 14th of November 2019

In Spain, the economy is growing well below previous years, but it will still close 2019 with an annual GDP increase of 2.0% and above the Eurozone average. We expect growth to stabilize in 2021 towards its long-term potential rate, at 1.5%. Nevertheless, domestic and international risks threaten this baseline scenario. Therefore, there is a clear need to guarantee a framework of certainty and economic reforms that generate activity. This is confronted, however, by the current political reality.

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The inertia of economic growth

The inertia of economic growth

  • Por José María Romero Vera
  • 22nd of July 2019

Despite the slowdown in the global economy, the most important indicators of the Spanish economy confirm prolongation of the expansive phase. At Equipo Económico we foresee an increase in GDP of 2.4% in 2019 and 2.1% in 2020. Inertia in activity continues to be sustained in the reforms implemented in previous years, and again in the historical minimum interest rates.

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Trick or treat? The regional effects of Brexit and the automotive sector

Trick or treat? The regional effects of Brexit and the automotive sector

  • Por Marta Otero Moreno
  • 22nd of May 2019

There will still be a bit more waiting, who knows if until next October 31st, to be certain of how the United Kingdom will leave the European Union (EU). Only then there will be enough information enabling us to analyze what real effects Brexit will have. At the moment, announcements related to future tariff policies in case of a no deal situation, together with the analysis of the current commercial patterns between Spain and the United Kingdom, allow us to identify the automotive sector as one of the potentially most affected. However, the effects are not homogeneous throughout the Spanish Regions. Thus, the production and, therefore, the employment level of the automotive sector in Aragon, Navarra and Castilla y Leon show a greater degree of exposure to the British market than other regions.

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Economic policy messages do matter

Economic policy messages do matter

  • Por José María Romero Vera
  • 5th of April 2019

The case of Italy in the last year, and of other countries in the past, show the negative effect that the wrong economic policy messages can have. The Spanish economy continues to grow noticeably above the Eurozone average. However, it is immersed in a different phase of the economic cycle with lower expansion rates. The design of economic policy plays a determining role in the economy’s cyclic performance. Yet the uncertainty generated by numerous economic policy messages, at the national and regional level, has resulted in a significant drop in the number of car registrations in Spain in the last few months.

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Business strategies in light of Brexit

Business strategies in light of Brexit

  • Por José María Romero Vera
  • 20th of December 2018

The increase and materialization of certain risks for global growth throughout 2018 have worsened the outlook for the coming years. In Europe, Brexit will continue to represent the main political risk facing the region during 2019. The business strategies to deal with it necessarily differ depending on the considered scenario. Among them, the possibility of a hard Brexit in 100 days must be accounted for.

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Downturn and the need for certainty

Downturn and the need for certainty

  • Por José María Romero Vera
  • 14th of November 2018

The Spanish economy is immersed in a downturn phase of the expansive economic cycle, with more moderate variation rates. According to estimates in Equipo Economico, GDP will grow 2.6% in 2018 and 2.2% in 2019. These figures mean a downward revision with respect to our previous estimates, as a result of the change in external tail winds, lack of economic reforms since 2016 and the uncertainty generated in the last months by the messages on economic, budgetary and fiscal matters.

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Significant dynamism vs. greater uncertainty

Significant dynamism vs. greater uncertainty

  • Por José María Romero Vera
  • 11th of July 2018

Spain’s economic growth has continued to show notable dynamism in the first semester 2018, clearly above the European average. It moves forward along the same lines as the global product. However, we also observe the growing divergence occurring as the year goes on between the robust economic data and the greater uncertainty arising from an increased risk, both for the global economy and Spain.

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A well-financed economy, but risks are on the upside.

A well-financed economy, but risks are on the upside.

  • Por José María Romero Vera
  • 28th of May 2018

The Spanish economy is still undergoing intense and differential economic growth regarding the euro area. In addition, it is progressing with a more solid basis than previous periods of growth. However, the scenario we consider for the Spanish economy is now subject to upside risks, both inside and outside Spain.

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Regional debt financing

Regional debt financing

  • Por Regional debt financing
  • 23rd of May 2018

Spanish Regional Governments are clearly benefiting from the intense economic growth of the national economy. However, there has been a very important increase in the regional debt over the last years. In this context, the Extraordinary Liquidity Mechanisms (ELM) have gained great importance in the share they represent of the regional debt. We now expect the return of the regions to the markets to finance their debts and the improvement of their debt-to-GDP ratio.

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Will Spanish consumption continue to grow?

Will Spanish consumption continue to grow?

  • Por José María Romero Vera
  • 22nd of March 2018

The Spanish economy have started the year 2018 with strong inertia. The most recent indicators point to the fact that consumption growth has accelerated in the first quarter of 2018. In this way, GDP growth will again be supported by the strength of household consumption, deemed to increase by 2.3% this year and 2.1% next year. Several factors will continue to support positive consumption data in the coming months. In this scenario, we estimate consumption will only reach its pre-crisis levels in the second quarter of 2019, leaving room for recovery.

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Going forward to the fourth year increasing up to 3%

Going forward to the fourth year increasing up to 3%

  • Por Marta Otero and José María Romero
  • 9th of March 2018

The Spanish economy has started this year 2018 with a strong inertia in its advance rate, which takes Equipo Económico to maintain our forecast for last December to a GDP increase of 2.8% in 2018. We estimate that this growth will also spread up during 2019, with an increase of 2.4% in GDP. The main risks in this positive scenario are political, associated with populist movements inside and outside of Spain.

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New growth of car registrations and exports in Spain in 2017

New growth of car registrations and exports in Spain in 2017

  • Por Pierre Moinet Ybarra
  • 31st of January 2018

In 2017 there was an increase in vehicle sales in Spain compared to previous year but at lower rates, once again revealing that it is still upwards compared to the historical figures of 2007. Regarding exports, the fall in sales to the United Kingdom reflects a new negative effect because of the Brexit.

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Spain will grow with strength in 2018

Spain will grow with strength in 2018

  • Por José María Romero Vera
  • 19th of December 2017

In an auspicious international context, from Equipo Economico we foresee that Spanish GDP will continue to move forward in 2018 at an annual rate of 2.8%. The Spanish economy is currently benefiting from the expansive cycle initiated after the deep crisis, thanks to the economic reforms undertaken, and despite the impact of the increase in uncertainty associated with the situation in Catalonia.

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Is the

Is the "new tourist" changing the hotel industry?

  • Por Meral Canet Munuera
  • 10th of July 2017

Although hotel industry has been encouraged by excellent tourism data, is it really benefiting to its full potential? There is a negative trend in hotel supply in relation to the number of visitors. The irruption of alternative business models that offers tourist accommodation, such as technological platforms of collaborative economy between private individuals together with the new patterns of consumption of tourists, have led to the emergence of a new and important competitor.

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Intense growth will continue during 2017 and 2018

Intense growth will continue during 2017 and 2018

  • Por José María Romero Vera
  • 30th of June 2017

Within a more encouraging international scenario, the Spanish economic growth has outperformed the most optimistic forecasts throughout 2017. In Equipo Económico we estimate that the Spanish economy will continue growing vigorously, at a 3.3% GDP. The momentum created during this year will sustain the growth rate throughout 2018, maintaining it near a 3% GDP. We therefore estimate a growth of 2.8% GDP for the coming year.

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Prices, wages and the challenge of competitiveness in 2017

Prices, wages and the challenge of competitiveness in 2017

  • Por Ricardo Martínez Rico
  • 28th of March 2017

After the lengthy period experienced by the Spanish economy since the end of 2013 with a moderate and even negative performance of prices, with a fall in prices of 1.1% posted in April 2016, the year-on-year Consumer Price Index (CPI) in January and in February was 3%, which implied a significant acceleration in price increases. This is largely due to the energy component of the CPI, which will gradually moderate as the year progresses, closing 2017 with average inflation of 2.2, according to estimates by Equipo Económico. This return of inflation, however, has not been risk free.

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What will happen to the real estate market this year?

What will happen to the real estate market this year?

  • Por Carlos Saúco López de Sancho
  • 23rd of March 2017

The real estate market in Spain is in a bullish mood and continues steadily on the path of recovery and sustainable growth, after having undergone an important adjustment in the last decade, both in terms of volume and prices. Thus, during the past year, home sales experienced growth of 13.6% to attain 403,866 transactions, making three consecutive years of upward trend. The challenge facing the real estate sector is, in any case, twofold: stabilizing the sector and avoiding the mistakes and excesses committed in the past. Therefore, recovery must be prudent, sustained and gradual throughout 2017.

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The Spanish economy will grow in 2017 by 2.7% GDP

The Spanish economy will grow in 2017 by 2.7% GDP

  • Por José María Romero Vera
  • 23rd of December 2016

The Spanish economy is closing 2016 growing by 3.2% in terms of GDP to position itself regarding the Euro area in terms of economic growth, job creation and boost in exports. For 2017 we foresee GDP will grow 2.7%, thanks to the strength with which the year is commencing. Nonetheless, in a less favorable global context progress must be made on reforms; we must not return to those implemented in the last few years.

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