The shades of the Spanish economy

The shades of the Spanish economy in graphs

The Bank of Spain has published recently its annual report depicting what we can call the 50 shades of the Spanish economy. Herein is a summary of some important data.

Starting with the evolution of the domestic demand which is clearly shown to be the engine driving GDP growth in 2014 and 2015, with an emphasize on the domestic consumption´s role. This rebound in consumption is tailored towards durable goods, for which the Spaniards have postponed purchasing during the financial crisis (such as changing TV, fridge…).

Graph 1: National demand and its components



However, this rebound in consumption is still higher than the growth in real wages, which could indicate that the actual growth in GDP is due to a momentary effort in household consumption. In the graph below, we can see the drop in wages that Spain suffered from since 2009 to see one of the consequences of the crisis. Today, the wages are far from what they were before the crisis keeping in mind that the inflation is negative.

Graph 2: Consumption and Real Wages

consumo y salario real 18


In terms of GDP, foreign demand has been falling in 2014 and 2015, while the last time we saw a fall in foreign demand was in 2007 which could be alarming. Spain seems to be performing better, but if the major economies are not doing well, this can have a contagious effect on Spain sooner or later.

Graph 3: GDP, national demand and foreign demand

pib demanda exterior3


Looking at gross wealth, today it is still far from 2008 levels. The main investment of Spaniards is real estate but it is still far from recovering from the golden years levels reached in full bubble.

Graph 4: Household Wealth

riqueza hogares


When it comes to debt, the national debt has already exceeded 100% of GDP and the EU average despite having been well below the level of debt of the Eurozone. Warnings were in place several years ago while some claimed that Spain was solvent due to its low level of debt.

Graph 5: Debt

deuda espan 8



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