SPAIN AT A TIME OF EXTRAORDINARY MONETARY CHALLENGES
Jos茅 Luis Malo de Molina Director General
GIC-BBVA-Fundaci贸n del Pino Madrid 13 May 2015
GENERAL DIRECTORATE ECONOMICS, RESEARCH AND STATISTICS
THE ONGOING RECOVERY IN ACTIVITY
After a prolonged recession, the Spanish economy has started to experience a recovery phase REAL GDP GROWTH (y-o-y rates) SPAIN
EA
4,0
3,0 2,0 1,0 0,0 -1,0 -2,0 -3,0
-4,0 -5,0 -6,0 -7,0 2008
2009
2010
2011
2012
2013
2014
DIRECCIÓN GENERAL DEL SERVICIO DE ESTUDIOS
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THE TWO PILLARS OF THE RECOVERY: THE RELIEF IN THE EURO AREA CRISIS The stabilization of the euro area has strongly mitigated financial tensions and supported the improvement in confidence ECONOMIC SENTIMENT INDICATOR (standardised)
SPREAD SPAIN-GERMANY (10Y bonds)
SPAIN 6
1,0
5
0,5
4
0,0
3
-0,5
2
-1,0
1
-1,5
0
EURO AREA
-2,0 2010
2011
2012
2013
2014
2015
2010
2011
2012
2013
2014
2015
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THE TWO PILLARS OF THE RECOVERY: ADJUSTMENT AND REFORMS AT THE NATIONAL LEVEL
The recovery is based on the correction of imbalances through adjustments and reforms • The labour market reform has enabled wage moderation to take hold and jobs to be created •
Competitive disinflation has led to a correction of the external deficit
•
The adjustment of residential investment has been completed
•
Public finances are back on track
DIRECCIÓN GENERAL DEL SERVICIO DE ESTUDIOS
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THE LABOUR MARKET REFORM
Changes in the labour market have brought wage moderation and inverted job destruction trends COMPENSATION PER EMPLOYEE. MARKET ECONOMY (Annual rate) 5
EMPLOYMENT. TOTAL ECONOMY (Annual rate) 2 1
4 0
-1
3
-2
2
-3 -4
1 -5
-6
0
-7
-1 2009
2010
2011
2012
2013
2014
-8 2009
2010
2011
2012
2013
2014
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COMPETITIVENESS ADJUSTMENT THROUGH AN INTERNAL DEVALUATION PROCESSS The correction of past competitiveness losses has enabled the external deficit to be absorbed NET LENDING (+) OR NET BORROWING (-) OF THE NATION (% GDP)
UNIT LABOR COSTS RELATIVE TO THE EURO AREA ULC, whole economy
Compensation per employee
Productivity, whole economy
4
%
Index 1998=100 120
2
0
115
-2 110
-4 105
-6 100
-8 95
-10
-12
90 00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
00
01
02
03
04
05
06
07
08
09
10
11
12
DIRECCIÓN GENERAL DEL SERVICIO DE ESTUDIOS
13
14
6
ADJUSTMENT OF THE HOUSING MARKET
The severe adjustment in residential investment has bottomed out HOUSE PRICE
RESIDENTIAL INVESTMENT (% GDP)
Index 2007=100 110
11
100 10 90 9
80 70
8
60
7 50 6
40 30
5
20 00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
4 00
01
02
03
04
05
06
07
08
09
10
11
12
13
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7
FISCAL CONSOLIDATION EFFORT AND SOSTENIBILITY OF PUBLIC FINANCES
Significant headway has been done in redressing public finances
GENERAL GOVERNMENT BALANCE (excluding aid to financial institutions) % GDP
4
2 0 -2 -4 -6 -8 -10 -12 2007
2008
2009
2010
2011
2012
2013
2014
DIRECCIÓN GENERAL DEL SERVICIO DE ESTUDIOS
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THE SLOW DIGESTION OF THE BURDENSOME LEGACY OF THE CRISIS: ACTIVITY, EMPLOYMENT AND INCOME
A setback in welfare levels REAL GDP
GDP PER CAPITA (IN REAL PPP)
SPAIN
EURO AREA
SPAIN
2007-Q1=100
EURO AREA
I2007-Q1=100
104
102
102
100
100
98
98
96
96
94
94
92
92 90 2007
2008
2009
2010
2011
2012
2013
2014
90 2007
2008
EMPLOYMENT SPAIN
2009
2010
2011
2012
2013
2014
UNEMPLOYMENT RATE EURO AREA
SPAIN
EURO AREA
%
2007-Q1=100
30
105
25
100
20 95
15 90
10
85
80 2007
5
2008
2009
2010
2011
2012
2013
2014
0 2007
2008
2009
2010
2011
2012
2013
2014
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THE LEGACY OF HIGH INDEBTEDNESS
Indebtedness levels are high and their reduction will take time PUBLIC DEBT (% GDP)
NON FINANCIAL CORPORATIONS DEBT (% GDP)
110
130
100
120
90
110
80
100
70
90
60
80
50
70
40
60
30
50
20
40 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
HOUSEHOLDS DEBT (% GDP)
90 85 80 75 70 65 60 55 50 45 40
INTERNATIONAL INVESTMENT POSITION (% GDP)
100 90
80 70 60 50
40 30 20
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
DIRECCIÓN GENERAL DEL SERVICIO DE ESTUDIOS
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THANKS FOR YOUR ATTENTION
GENERAL DIRECTORATE ECONOMICS, RESEARCH AND STATISTICS