Spain Business
Spain Business Brief - Wednesday May 14 2008
By h.b. - May 14, 2008 - 12:43 PM
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The economic slowdown in Spain has been confirmed with the latest advance indicator from the National Statistics Institute, INE, for growth for the first quarter of the year, coming in at 2.7% of G.D.P. The number is 0.8% lower than for the last quarter of last year and comes as a consequence of the fall in internal demand and the slowdown in the construction sector. It’s the lowest number seen for a quarter for five years, and the Minister for Tax and the Economy, Pedro Solbes, says that it confirms the ‘rapid deceleration’ of the economy. Over the first three months of the year growth was only 0.3%.
Meanwhile there has been unlikely agreement from the ex head of the IMF, Rodrigo Rato, and the previous Socialist Prime Minister, Felipe González, who have both said that economy has still not reached bottom. The two men were debating the situation at a conference organised by Repsol YPF, but both men said they hoped that the slow down will not be a long one.
González also said he doubted the European Union’s goal of 20% reduction CO2 emissions for the continent set for 2020 would be met, and he also claimed that those who blamed biofuels for the current crisis in the price of cereals ‘had no idea’.
Spain’s National Energy Commission, CNE, has asked the Government for an 11.3% increase in electricity prices from July 1. They say the prices paid by consumers should reflect the real cost of generating the power. The request is short of the 20% mentioned in some media last Friday.
Now the Government has to decide whether or not to authorise the increase in July, but Minister for the Economy, Pedro Solbes, has already said that he is in favour of approximating the price to the real cost ‘in a progressive way’, and he has gone on to say the 11.3% increase is ‘good’.
Such an increase has already been attacked by the Partido Popular opposition who say it is ‘unacceptable’ given the current financial situation that many families find themselves in.
The planned strike action by pilots in Spanair will not finally go ahead. The SEPLA pilots’ union has now assured the airline’s users a period of stability over the summer season, after the company has guaranteed that they will meet the compliments previously agreed between both sides.
Telefónica has announced increased profits of 22% for the first quarter of the year compared to last at 1.5 billion €.
Turnover was up by a mere 1.1% at 13.89 billion while the operational profit was up by more than 5% at 3.37 billion.
Other companies to announce first quarter numbers include FCC seeing profits fall by 35.8% at 83.9 million €. The fall was caused by a poorer contribution by Realia, after their launch on the stock market.
Abertis has seen a net profit of 134 million for the first quarter, up 9.4% compared to last year with 76% of their income coming from motorways. The company invested 394 million in the year so far to March.
Iberia has announced losses due the airline says to the increased price of aviation fuel. Income was practically unchanged at 1.3 billion, and occupancy to April came in at 70%. Net losses for the first quarter were 441,000.
And Ferrovial has seen profits for the first three months of the year fall by 82% with income from construction down 8% and from the BAA British Airports Authority down 13%. Without the extraordinary items of last year, profits this first quarter would have been up 7%.
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