In H2 2019, growth in lending to households and non-financial companies diminished compared with 2018. This is mainly explained by the gloomy economic outlook
and the slight tightening of loan standards, although the financing costs remained at fairly moderate levels.
In the case of households, bank loans rose on average by 0.2% year-on-year, compared with 0.4% in the same period of 2018. The fall in consumer credit particularly stands out, from 14.4% year-on-year in H2 2018 to 9.8% in the same period of 2019, and mortgage loans for house purchase continue at negative rates (-1.2% year-on-year).
Lending to non-financial companies increased by 0.6%, compared with 1.3% in H2 2018, as a result of a fall of 2.4% in investment from abroad (vs +2.7% in H2 2018).
External sector, Spain
In 2019, exports of Spanish goods fell to 1.7% year-on-year (€290 billion), a record low since 2009 and 1.8 pp below the EU-27 average (3.5%).
By destination, exports to the EU (65.7% of the total) increased by 2% year-on-year and those destined for the rest of the world rose by 1.3%.
On the other hand, imports of goods steadily declined to 0.8% year-on-year (€322 billion), which is 0.5 pp less than the EU-27 average (1.3%).
As a result, the trade deficit was narrowed by 7%, amounting to €32 billion.
In February, the new revaluation1 of the contributory pensions in the payroll to 0.9% implied a monthly increase of 1.1%, which is 0.5 pp higher than the average increase in 2019. Thus, the total amount of the payroll hit €9.87 billion to set a new record high.
The retirement pension (72% of the total) increased by 1.2% compared with January, and by 0.3% in comparison with the intermonthly trend of 2019.
The German economy ended the year 2019 with an average year-on-year growth of 0.6%, which is 0.2 pp less than the Eurozone growth forecast.
In Q4 2019, Germany’s GDP stagnated (0% quarter-on-quarter), predominantly due to the decline in exports of goods and services (-0.2%).
This evolution is mainly explained by the weak international demand, especially from China, determined by the transformation of its economic model.
As for domestic demand, the fall in investment of machinery and capital goods (-0.1% quarter-on-quarter) and also the moderation in private consumption by 0.7% quarter-on-quarter over the last three quarters prior to the current 0.3%.
Labour market, UK
Job creation in the United Kingdom rises against the backdrop of uncertainty and significant deterioration of the British economy as of H2 2019.
In Q4 2019, the number of employed people increased by 180,000 to a total of 32.9 million employees, and this starkly contrasts with the decline experienced in Q3 (58,000 fewer people). This increase exceeds the average job creation in the previous three quarters by 128,000 employees, ending 2019 with an average annual job creation of 84,000 employees per quarter.
On the other hand, the unemployment rate remained at historical lows (3.8%), and salaries rose by 2.9%, its lowest increase in 17 months.