Spain Economic Outlook 4Q12
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Transcript of Spain Economic Outlook 4Q12
Situation and Outlook for the Global Economy and for Spain
6 November 2012
Outlook for Global Economy and Spain
Page 2
Key themes
1
2
3
After the slowdown in 2012, global growth will gradually speed up from the end
of the year and during 2013, thanks to the monetary measures in developed
economies and those supporting growth in emerging economies
The risk scenarios are less likely that they were three months ago, if the
agreements are upheld and the measures are applied in the developed
countries, although there are still considerable challenges to be faced in the
Eurozone and in the US.
Emerging economies face the challenge of managing inflows
Spain: Spain is still expected to contract in 2012 and 2013, but the decline has
been less intense in the third quarter
The fiscal measures are bearing fruit but the recession is delaying meeting the target
Implementation of structural reforms is more necessary than ever before
4
5
6
Outlook for Global Economy and Spain
Page 3
Section 1
Global economy:
gradual acceleration backed by economic policies
Section 2
Spain: the economy continues to adjust, fiscal efforts are bearing fruit and the agenda of
reforms is more necessary than ever before
Index
Outlook for Global Economy and Spain
Page 4
Gradual acceleration of the global economy
Global GDP growth (%)Source: BBVA Research
Global growth is gradually picking up thanks to economic policy measures
Global growth is gradually picking up thanks to economic policy measures
… if the agreements are upheld and the proposed measures are applied, although there are still serious
risks
… if the agreements are upheld and the proposed measures are applied, although there are still serious
risks
The tail risk scenarios are currently less probable than three months ago…
The tail risk scenarios are currently less probable than three months ago…
In particular, due to monetary measures in developed economies and those supporting growth in developing
countries
In particular, due to monetary measures in developed economies and those supporting growth in developing
countries
2.8
-0.6
5.1
3.9
3.2 3.5
-2
-1
0
1
2
3
4
5
6
-2
-1
0
1
2
3
4
5
6
2008 2009 2010 2011 2012 (f) 2013 (f)
Advanced economies Emerging economies
Baseline Oct-12 Baseline Jul-12
Outlook for Global Economy and Spain
Page 5
Growth remains very heterogeneous
A three-speed world
Emerging markets: high growth with a slight slowdown
Emerging markets: high growth with a slight slowdown
Eurozone: slow, disparate, and vulnerable recovery, with doubts as to the effects of fiscal consolidation on
growth
Eurozone: slow, disparate, and vulnerable recovery, with doubts as to the effects of fiscal consolidation on
growth
US: slow recoveryUS: slow recovery
GDP growth by area (% yoy)Source: BBVA Research
3.2 3.5
2.11.8
-0.5
0.3
5.2
5.8
-2
0
2
4
6
8
2012 2013 2012 2013 2012 2013 2012 2013
World USA Eurozone Eagles
Aug-12 Nov-12
Outlook for Global Economy and Spain
Page 6
The ECB's decision means that the base scenario is rather more probable provided that the agreements are implemented
efficiently
The ECB's decision means that the base scenario is rather more probable provided that the agreements are implemented
efficiently
Base scenarioBase scenario Risk scenario (lower likelihood)Risk scenario (lower likelihood)
ECB: “whatever it takes” to preserve the euro (Outright Monetary Transactions, or OMT)
ECB: “whatever it takes” to preserve the euro (Outright Monetary Transactions, or OMT)
Risk factors
Other global risksOther global risks
“Fiscal precipice” in the US“Fiscal precipice” in the US
Slowdown in China and in other emerging economiesSlowdown in China and in other emerging economies
Outlook for Global Economy and Spain
Page 7
Eurozone: business expectations and financial stress*Source: BBVA Research and Markit
US: business expectations and financial stress*Source: BBVA Research and Markit
BBVA Research financial stress index (FSI): credit risk (5-year CDS, CDS and financial debt of non-financial companies), volatility (shares, interest rate and
exchange rate) and liquidity tension (interbank rate spread and the 3-month risk-free rate) measures.
The potential of monetary policies in the US and EMU
-,600
,00
,600
1,200
1,800
2,40040
44
48
52
56
60
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Eurozone PMI Eurozone FSI (inverse scale)
-,400
,00
,400
,800
1,20048
52
56
60
64
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
US PMI US FSI (inverse scale)
Outlook for Global Economy and Spain
Page 8
Europe on the move
The ECB announced a new bond purchase programme (OMT): an “European-style” lender of last resort that will operate under fiscal conditionality
The ECB announced a new bond purchase programme (OMT): an “European-style” lender of last resort that will operate under fiscal conditionality
The German Constitutional Court backed the commitment to the ESM, which is now ready to intervene (with up to EUR200Bn)
The German Constitutional Court backed the commitment to the ESM, which is now ready to intervene (with up to EUR200Bn)
Single banking supervision is pressing ahead, although slower than expectedSingle banking supervision is pressing ahead, although slower than expected
Three positive events have opened a new window of opportunity
Outlook for Global Economy and Spain
Page 9
Establishment of
the EFSF
French-German
agreement on PSI
ECB purchases
Spanish and
Italian debt
October summit
leaves doubts on
Greece. EFSF fund
allocation ineffective
First LTRO
of the ECBGrowing concern about
Spain (banking, fiscal,
reform)
Greek elections not
decisive. Risk of
Greek exit
ECB,
The euro is
irreversible.
Massive
bond
purchases if
conditions
are there
Spain and Italy: yield on 10-year bond (%)Source: BBVA Research and Haver
Will Europe seize this opportunity?
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Spain Italy
Outlook for Global Economy and Spain
Page 10
Change in two-year public debt yields since Draghispeech (bp)(Last data: 5 November 2012)Source: BBVA Research and Bloomberg
The European financial scenario has improved …
There are capital inflows into the Eurozone, for both fixed income and equities
There are capital inflows into the Eurozone, for both fixed income and equities
Spanish banks and non-financial companies have again issued debt
Spanish banks and non-financial companies have again issued debt
Demand for Spanish public debt on the secondary market by non-residents is reappearing
Demand for Spanish public debt on the secondary market by non-residents is reappearing
The lower risk aversion has encouraged some corporate debt issues in the Eurozone
The lower risk aversion has encouraged some corporate debt issues in the Eurozone
-400
-350
-300
-250
-200
-150
-100
-50
0
50
100
Germany France Ireland Italy Spain Portugal
Outlook for Global Economy and Spain
Page 11
TARGET2 position with respect to the Eurosystemasset position(+) and liability position(-) (EUR Bn) Source: BBVA Research and Central Banks
Change in the interest rate on new bank loans (pb, December 2010 to July 2012)Source: ECB, IMF and BBVA Research
… although there are still considerable challenges
The fragmentation of the financial markets is stimulated by national legislation, which must be avoided with banking union
IRE
PT
CY
IT
SP
BE
FR
AUFI
GER
NTH
-60
-40
-20
0
20
40
60
80
100
120
140
-80
-60
-40
-20 0
20
40
60
80
100
Corporate loans
Households lo
ans
-500
-400
-300
-200
-100
0
100
200
300
400
500
600
700
800
900
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Germany Spain
Outlook for Global Economy and Spain
Page 12
US.: GDP growth (yoy)Source: BBVA Research and BEA
US: QE3 offsets downside risks
US is trying to tackle political and fiscal uncertainty with monetary policy
US is trying to tackle political and fiscal uncertainty with monetary policy
The "fiscal precipice" and the European crisis are the main concerns for the US
The "fiscal precipice" and the European crisis are the main concerns for the US
The improvement in conditions in the real estate sector does not counter weak external demand
The improvement in conditions in the real estate sector does not counter weak external demand
Growth close to 2%. The “moderate” fiscal adjustment is offset by QE3, while the effects of hurricane Sandy
will be relatively small
Growth close to 2%. The “moderate” fiscal adjustment is offset by QE3, while the effects of hurricane Sandy
will be relatively small
2.1
1.8
0.0
0.5
1.0
1.5
2.0
2.5
2012 2013
US
Nov-12 Jul-12
Outlook for Global Economy and Spain
Page 13
QE3 and extension of the period of interest rates
at minimum levelsSource: BBVA Research
US: estimated impact of QE3 and extension of the
monetary policy forecast (p.p., with respect to the scenario without policy changes by the Fed. OEF model)Source: BBVA Research
* J. C. Williams (Chairman Fed San Francisco)
QE3: monetary expansion "as long as is necessary"
Monetary stimulus until the unemployment rate drops by close to 6%*
-1.0
0.0
1.0
2.0
3.0
4.0
-6.0
0.0
6.0
12.0
18.0
24.0
Mar-12
Sep-12
Mar-13
Sep-13
Mar-14
Sep-14
Mar-15
Sep-15
Mar-16
Sep-16
Higher liquidity
(Left Axis)
Extended period of minimum rates
(Right Axis)
New
Previous
(% GDP)
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
2012 2013 2014 2015 2016
GDP growthUnemployment rate (pp, inverted)Inflation
Outlook for Global Economy and Spain
Page 14
World 2012 2013 2014 2015 2016
Growth 0.0 0.1 0.2 0.4 0.3
Inflation 0.0 0.0 0.1 0.2 0.4
Global impact of QE3 and extension of the period of low
rates in the US (commerce)Source: BBVA Research
The global impact of QE3
Ranking GDP growth Inflation
1 Emerging Asia Emerging Asia
2 Latin America Latin America
3 Eurozone Eurozone
Ranking of impact by area
The positive momentum of activity in the US is transmitted to the rest of the world not only through
commerce
The positive momentum of activity in the US is transmitted to the rest of the world not only through
commerce
The challenge for Europe is to avoid lagging behind this improvement in global growth
The challenge for Europe is to avoid lagging behind this improvement in global growth
It also encourages greater capital inflows and falls in the risk premium in emerging economies
It also encourages greater capital inflows and falls in the risk premium in emerging economies
Note: with no change in the global risk premium. Deviations in p.p., with respect to
the scenario without policy changes by the Fed. OEF model.
Outlook for Global Economy and Spain
Page 15
The impact of QE3 on a typical emerging economy*
Impact on economic growth(pp on base case scenario)Source: BBVA Research
Impact on inflation(pp on base case scenario)Source: BBVA Research
* Used as a benchmark to calculate the impact on an emerging economy that is sufficiently open to the outside world both commercially and financially
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2012 2013 2014
Trade channel
Trade + risk premium channels (flexible)
Trade + risk premium channels (activism)
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2012 2013 2014
Trade channel
Trade + risk premium channels (flexible)
Trade + risk premium channels (activism)
Outlook for Global Economy and Spain
Page 16
Section 1
Global economy:
gradual acceleration backed by economic policies
Section 2
Spain: the economy continues to adjust, fiscal efforts are
bearing fruit and the agenda of reforms is more necessary than
ever before
Index
Outlook for Global Economy and Spain
Page 17
Main changes in the scenario
Drivers of the economic scenarioSource: BBVA Research
New factors
Growth forecast 3 months ago
2012 and 2013 growth forecasts still intact2012: -1.4%2013: -1.4%
2Q12 data in line with our expectations and 3Q12 better than expected
The risk premium and capital flows are an improvement on the forecasts from three months ago
Structural reforms
2012: -1.4%2013: -1.4%
Marginal deterioration in growth prospects in Europe for 2012
Downward revision of historical data of the National Accounts
Fiscal consolidation: deviation from the 2012 target is more likely
Outlook for Global Economy and Spain
Page 18
1. Adjustment of the imbalances continues
Trends in GDP in real terms during periods of property market crisis (t=100)Source: BBVA Research from Haver data
Note: t is the period in which the price hit its peak* Refers to real estate market crises in the sample that have already concluded** Refers to real estate market crises in the sample that are still ongoing
The Spanish economy is correcting accumulated imbalances
The Spanish economy is correcting accumulated imbalances
The downturn in activity in Spain (and in other European countries) seems to have been greater and
recovery slower than in other occasions
The downturn in activity in Spain (and in other European countries) seems to have been greater and
recovery slower than in other occasions
The largest of these imbalances is found in the real-estate sector
The largest of these imbalances is found in the real-estate sector
80.0
85.0
90.0
95.0
100.0
105.0
110.0
115.0
120.0
t
t+1
t+2
t+3
t+4
t+5
t+6
t+7
t+8
t+9
t+10
t+11
t+12
t+13
t+14
t+15
t+16
t+17
t+18
MinMaxSPA (current crisis)Previous crisis average*Current crisis average (GBR, DNK, IRE, NLD)**
Outlook for Global Economy and Spain
Page 19
2. Still in recession but the decline is stabilising
Spain: real GDP growth and forecasts based on MICA-BBVA model (%, qoq)Source: BBVA ResearchCurrent forecast: 5 November
In 3Q12, the Spanish economy remains in recession…In 3Q12, the Spanish economy remains in recession…
Employment will continue to be hindered by the negative outlook for growth
Employment will continue to be hindered by the negative outlook for growth
Available data indicate that growth in 4Q12 is likely to remain negative, although not as severely as we had
foreseen
Available data indicate that growth in 4Q12 is likely to remain negative, although not as severely as we had
foreseen
… although the contraction was smaller than was forecast three months ago
… although the contraction was smaller than was forecast three months ago
-1.5
-1.0
-0.5
0.0
0.5
1.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
CI at 20%
CI at 40%
CI at 60%
Point estimate MICA-BBVA
Data (BBVA Research forecast fo 4Q12)
Outlook for Global Economy and Spain
Page 20
Spain: changes in the breakdown of the growth forecasts for 2012 and 2013Source: BBVA Research, using Consensus Forecast data
2. Still in recession but the decline is stabilising
The uncertainty about growth prospects in 2012 has decreased
The uncertainty about growth prospects in 2012 has decreased
Now, just 13.0% forecast a contraction of over 2.1% (86.7% between 1.4% and 1.8%)
Now, just 13.0% forecast a contraction of over 2.1% (86.7% between 1.4% and 1.8%)
Before the summer, 28.6% of institutions expected a contraction of over 2.1% in 2012 (50% between 1.4% and 1.8%)
Before the summer, 28.6% of institutions expected a contraction of over 2.1% in 2012 (50% between 1.4% and 1.8%)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
(< -2,8)
(-2,8; -2,5)
(-2,5; -2,1)
(-2,1; -1,8)
(-1,8; -1,4)
(-1,4; -1,1)
(> -1,1)
Relative frequency
Forecast annual growth (%)
2012: June-2012 (Average: -1,6% )
2012: October-2012 (average: -1,6%)
2013: October-2012 (average: -1,6%)
Outlook for Global Economy and Spain
Page 21
3. Exports continue to be the main support
Spain: exports of goods and services of large firms (in real terms, % yoy)Source: BBVA Research based on Datacomex data
Positive trend in Spanish exports, especially to emerging countries
Positive trend in Spanish exports, especially to emerging countries
Short-term impact of the labour market reforms greater than expected
Short-term impact of the labour market reforms greater than expected
Results of the Supplier Payment Plan better than expected
Results of the Supplier Payment Plan better than expected
Lower impact of fiscal consolidation or greater bringing forward of spending due to VAT increaseLower impact of fiscal consolidation or greater
bringing forward of spending due to VAT increase
What can be behind this positive surprise?
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Total Third countries EU
Outlook for Global Economy and Spain
Page 22
Cumulative change in global export share and relative export pricesGoods and services, 1999-2011. Source: BBVA Research based on European Commission and OMT data
3. Exports continue to be the main support
FR
UK
CAN
JP
IT
US
FIN SWE
GR
DEN
PT
AT
IRE
GER
SP
NTH
-30
-20
-10
0
10
20
30
-45 -40 -35 -30 -25 -20 -15 -10 -5 0
Change in REER (%)
Change in the global export share (%)
The Spanish puzzle: factors linked tothe business enviroment
Unlike other countries, between 1999 and 2011 Spain's share of exports barely fell by 8.9%
Unlike other countries, between 1999 and 2011 Spain's share of exports barely fell by 8.9%
The prices are important, but other factors in thebusiness environment are more so
The prices are important, but other factors in thebusiness environment are more so
If the effect of relative export prices were eliminated, the Spanish share would have increased
If the effect of relative export prices were eliminated, the Spanish share would have increased
Outlook for Global Economy and Spain
Page 23
Spain: Balance of payments and capital flows (Cumulative 12-month, % of GDP) Source: BBVA Research, based on Bank of Spain data
4. Improvement in risk premium and capital flows
Preventing a systemic risk event from occurringPreventing a systemic risk event from occurring
Reducing risk aversion: there has been a limited reopening of private debt markets
Reducing risk aversion: there has been a limited reopening of private debt markets
Reducing the upward pressure on the risk premium and capital flows in Spain
Reducing the upward pressure on the risk premium and capital flows in Spain
Ensuring the functioning of the monetary policy in the Eurozone
Ensuring the functioning of the monetary policy in the Eurozone
The announcements by the ECB have contributed to:
-4
-3
-2
-1
0
1
2
3
4
-40
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
35
40
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12 (e)
Oct-12 (e)
Eurosystem
Rest
FDI inflows
Current Account (rhs) (calculated as a residual)
2629
343534
Outlook for Global Economy and Spain
Page 24
5. A significant fiscal adjustment
Public Administrations: breakdown of the public deficit excluding aid given to the financial system (% GDP)Source: BBVA Research, based on MINHAP data
Fiscal consolidation is working: fiscal efforts in 2012 will be over 4pp of GDP
Fiscal consolidation is working: fiscal efforts in 2012 will be over 4pp of GDP
Overall, there are still major reforms to be undertaken, that would increase the efficiency of the
public authorities
Overall, there are still major reforms to be undertaken, that would increase the efficiency of the
public authorities
… although at the current pace and with consistent fiscal adjustment, structural balance would be
achieved in 2014
… although at the current pace and with consistent fiscal adjustment, structural balance would be
achieved in 2014
The economic downturn is invariably delaying the achievement of the nominal target …
The economic downturn is invariably delaying the achievement of the nominal target …
Outlook for Global Economy and Spain
Page 25
Spain: fiscal adjustment and GDP growthSource: BBVA Research based on INE data
5. A significant fiscal adjustment
-2
-1
0
1
2
3
4
5
2011 2012 2011 2012
Fiscal effort (pp of GDP) GDP growth %
In 2011, the Spanish economy grew 0.4% despite the contractionary fiscal policy
In 2011, the Spanish economy grew 0.4% despite the contractionary fiscal policy
Debate on fiscal multipliersDebate on fiscal multipliers
Despite the unprecedented adjustment to public accounts in 2012 (fiscal efforts of 4.3pp of GDP), the
economy will contract around 1.4%
Despite the unprecedented adjustment to public accounts in 2012 (fiscal efforts of 4.3pp of GDP), the
economy will contract around 1.4%
Outlook for Global Economy and Spain
Page 26
Capital requirements of financial institutions in the adverse scenario* (EUR Bn)Source: Bank of Spain
* Does not include mergers under way or fiscal credit (with it EUR54Bn)
6. The restructuring of the financial system
One more step has been completed in the bank restructuring
One more step has been completed in the bank restructuring
Process of transferring assets to the Asset Management Company (Sareb), with discounts to attract private capital and not consolidate as public
debt
Process of transferring assets to the Asset Management Company (Sareb), with discounts to attract private capital and not consolidate as public
debt
The diverse nature of the system has been confirmed: the solvent institutions have 70% of the
assets
The diverse nature of the system has been confirmed: the solvent institutions have 70% of the
assets
Recapitalisation plans: EUR40Bn euros
in forecast public capital injections
Recapitalisation plans: EUR40Bn euros
in forecast public capital injections
-30
-20
-10
0
10
20
30
Grupo Santander
BBVA
Caixabank+Cívica
Kutxabank
Sabadell+CAM
Bankinter
Unicaja
Ibercaja
Caja3
Liberbank
CEISS
BMN
Banco de Valencia
Popular
NCG Banco
Catalunyabank
Bankia-BFA
€ 59Bn
Outlook for Global Economy and Spain
Page 27
Productivity: gross added value by hour worked, indicators by volume, 1995=100Source: BBVA Research, using EU KLEMS data
7. Agenda of reforms: more necessary than ever
In the expansion, Spain increased its productivity gap compared to the main economies
In the expansion, Spain increased its productivity gap compared to the main economies
Growth in productivity facilitates the sustainability of public accounts, private sector deleveraging and
internationalisation
Growth in productivity facilitates the sustainability of public accounts, private sector deleveraging and
internationalisation
Until the current economic crisis, aggregate productivity barely grew by an average of 0.6% per
year
Until the current economic crisis, aggregate productivity barely grew by an average of 0.6% per
year
The challenge is to create jobs and reduce the productivity gap
90
100
110
120
130
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
USA UK GER FR
EU15 SPA ITA
Spain
Outlook for Global Economy and Spain
Page 28
7. Agenda of reforms: more necessary than ever
Regulation and growth in productivity in the retail sectorSource: BBVA Research based on EUKLEMS and OECD data
Competitive services are a necessary condition to achieve productivity gains
Competitive services are a necessary condition to achieve productivity gains
Better sectorial regulation is associated with greater productivity gains
Better sectorial regulation is associated with greater productivity gains
The indicators of regulation in the retail sector take into account entry barriers, operating restrictions and
price control
The indicators of regulation in the retail sector take into account entry barriers, operating restrictions and
price control
Productivity in the services sector is key
AT
BEL
FIN
FRGER
GR
IR
IT JP
KOR
NTH
PT
SP
SWE
RU
USA
0
1
2
3
4
5
6
0 1 2 3 4 5
Real productivity growth annual average
1995-2007
Average regulation degree (low (1) high (5))
Outlook for Global Economy and Spain
Page 29
Regulation and growth in productivity in the business services sectorSource: BBVA Research based on EUKLEMS and OECD data
7. Agenda of reforms: more necessary than ever
Regulatory improvement and the professionalisationof business services (programming, information
services and other business services) …
Regulatory improvement and the professionalisationof business services (programming, information
services and other business services) …
… on the productivity and internationalisation of companies in the other sectors
… on the productivity and internationalisation of companies in the other sectors
… would not only foster the productivity of the sectorbut would also have a significant external impacts …… would not only foster the productivity of the sectorbut would also have a significant external impacts …
Productivity in the services sector is key
AT
BEL
FIN FR
GER
GR
IR
IT
JP
KOR
NTH
PT
SP
SWE
RU
USA.
-4
-3
-2
-1
0
1
2
3
4
5
6
0 1 2 3 4
Real productivity growth annual average
1995-2007
Average regulation degree (low (1) high (5))
Outlook for Global Economy and Spain
Page 30
Key themes
1
2
3
After the slowdown in 2012, global growth will gradually speed up from the end
of the year and during 2013, thanks to the monetary measures in developed
economies and those supporting growth in emerging economies
The risk scenarios are less likely that they were three months ago, if the
agreements are upheld and the measures are applied in the developed
countries, although there are still considerable challenges to be faced in the
Eurozone and in the US.
Emerging economies face the challenge of managing inflows
Spain: Spain is still expected to contract in 2012 and 2013, but the decline has
been less intense in the third quarter
The fiscal measures are bearing fruit but the recession is delaying meeting the target
Implementation of structural reforms is more necessary than ever before
4
5
6
Situation and Outlook for theGlobal Economy and for Spain
6 November 2012
Outlook for Global Economy and Spain
Page 32
Outlook for 2012-2013
Spain and Europe: macroeconomic forecastsSource: INE, Bank of Spain, Eurostat and BBVA Research forecasts
Spain EMU Spain EMU Spain EMU Spain EMU Spain EMU
FCE, Homes -3.9 -0.9 0.6 0.9 -0.8 0.1 -2.1 -1.0 -2.9 0.0G.C.F AA.PP 3.7 2.6 1.5 0.7 -0.5 -0.1 -3.6 -0.1 -6.9 -0.5Gross fixed capital formation -18.0 -12.7 -6.2 -0.3 -5.3 1.6 -9.7 -3.6 -7.5 -0.6Equipment, machinery and cultivated assets -23.9 -18.7 2.6 6.3 2.3 4.2 -7.6 -5.3 -3.7 -0.8Equipment and machinery -24.5 -18.8 3.0 6.4 2.4 4.3 -7.7 -5.3 -3.8 -0.8Construction -16.6 -9.9 -9.8 -4.4 -9.0 -0.2 -11.8 -3.4 -10.0 -1.4Housing -23.1 -12.5 -10.1 -2.9 -6.7 0.9 -6.8 -1.9 -8.4 0.4Other buildings and other constructions -9.1 -7.0 -9.6 -5.9 -11.0 -1.4 -16.3 -5.1 -11.7 -3.3
Change in inventories (*) 0.0 -0.9 0.1 0.6 -0.1 0.1 0.0 -0.5 0.0 0.0
Domestic demand (*) -6.6 -3.6 -0.6 1.2 -1.9 0.5 -4.0 -1.8 -4.7 -0.3
Exports -10.0 -12.4 11.3 11.0 7.6 6.4 3.8 3.1 8.2 3.2
Imports -17.2 -11.0 9.2 9.4 -0.9 4.2 -4.7 0.1 -1.8 2.2
Net trade balance (*) 2.9 -0.8 0.3 0.7 2.3 1.0 2.6 1.3 3.3 0.5
GDP at mp -3.7 -4.3 -0.3 1.9 0.4 1.5 -1.4 -0.5 -1.4 0.3
Pro-memoria
GDP w/o housing investment 0.5 -3.8 0.5 2.2 1.0 1.5 -1.0 -0.4 -0.9 0.3GDP w/o construction 1.6 -3.6 1.6 2.7 2.1 1.7 0.3 -0.2 -0.2 0.4Employment (LFS) -2.3 -1.8 -2.3 -0.5 -1.9 0.5 -4.4 -0.8 -3.4 -0.3Unemployment rate (% active pop) 20.1 9.6 20.1 10.1 21.6 10.2 25.0 11.4 26.1 11.8Current account balance (% of GDP) -4.5 0.1 -4.5 -0.1 -3.5 0.0 -1.4 1.2 -0.5 1.2Debt (% GDP) (**) 61.3 79.6 61.3 85.5 69.1 87.3 85.2 89.5 96.2 90.4Public sector balance (% of GDP) (**) -9.7 -6.3 -9.7 -6.2 -9.0 -4.1 -7.2 -3.2 -5.9 -2.3CPI (average period) 1.8 0.3 1.8 1.6 3.2 2.7 2.5 2.5 2.3 1.8CPI (end of period) 3.0 0.4 3.0 2.0 2.4 2.9 3.5 2.4 1.3 1.6
(*) contribution to growth
(**) excluding in Spain aid to the banking sector
2012 (f) 2013 (f)(Yoy growth rate)
2009 2010 2011