Growth Q1 2019 Spain
In Q1 2019, GDP grew by 0.7% quarter-onquarter, its biggest progress since the end of 2017, standing at 2.4% year-on-year, 1.2 pp above the Eurozone average.
The contribution of domestic demand to year-on-year growth reduced by 0.3 pp to stand at 2.2 pp, the lowest since Q4 2016. By components:
• Household consumption recorded its lowest progress since 2013 (1.4%), despite the creation of employment and the increase in remuneration per employee.
• Public administration consumption moderated to 2% compared with 2.2% in Q4 2018.
• Productive investment recorded an increase of 4.7%, which is 0.3 pp more than in Q4 2018.
After six consecutive quarters of negative contribution, external demand recovers its positive contribution to year-on-year GDP growth (0.2 pp) which is explained by a higher contraction in imports (1.2%) than that in exports (0,5%).
Labour market Spain
In April, registered unemployment in the Social Security fell by 91,518 unemployed people (-2.81% inter-monthly) and 172,302 year-on-year (-5.17%) to stand at 3,163,566 unemployed.
On the other hand, the number of affiliates increased by 186,785 people compared with March (0.98%) and 551,901 in year-on-year terms (2.95%). Thus, the total affiliation amounted to 19,230,362, recovering levels of July 2008.
Public accounts Spain
Until February, the joint deficit of the Central Administration, the Autonomous Communities and Social Security grew by 14.8% year-on-year to €11.9 billion (0.95% of GDP), due to a 19.1% year-on-year increase in the State deficit.
Additionally, in Q1 2019, the State deficit increased by 57.5% year-on-year to €6.75 billion (0.54% of GDP). This evolution is explained by a sizeable increase in public spending (6%), mainly in pensions and salaries of public employees, 4.9 pp higher than the increase in revenues (1.1%).
In this context, the European Commission has warned that the public deficit will reach 2.3% of GDP, which is 0.3 pp over the Government’s projection.
Euro area economic situation
In Q1 2019, the GDP of the Eurozone rose by 0.4% quarter-on-quarter, 0.2 pp higher than its growth in Q4 20181. This evolution contrasts with that of the Eurozone Economic Sentiment Indicator (ESI) that falls for the tenth consecutive month to reach 104 points, its record low level in 32 months.
Among the main economies of the Euro area:
• After the technical recession, Italy recorded a quarter-on-quarter growth of 0.2%, mainly on the back of the foreign sector, while domestic demand fell since the beginning of the year.
• In Germany2 the lower dynamism in the foreign sector and the industrial production forecast a quarter-on-quarter growth of around 0.2%.
• France expands 0.3% quarter-on-quarter, with year-on-year growth of 1.1%.
• Spain leads the growth with an increase of 0.7% quarter-on-quarter, recovering levels of Q1 of 2017.
2 Official Q1 figures (pending publication)
In this context, the European Commission’s 2019 growth forecasts are as follows:
HICP flash estimate
In April, the Harmonised Index of Consumer Prices (HICP) flash estimate of the Eurozone stood at 1.7% year-on-year, 0.3 pp higher than in March, mainly due to the increase in the prices of energy and services (1.9% year-on-year vs 1.1% in March).
As for Spain, the HICP reached 1.6%, reducing the difference with the Eurozone to 0.1 pp, as opposed to 0.4 pp (maximum difference) at the beginning of the year.
Public investment UK
Between 2013 and 2017, the British public investment in infrastructures increased by an annual average of 6.1%, accounting for 2.3% of total public expenditure, higher than that of France (1.5%), Germany (1, 2%), and Italy (0.9%).
The increase in public investment of the United Kingdom is mainly concentrated in large railway and telecommunications infrastructures.