Spain Business
Spain Business Brief - Friday June 27 2008
By h.b. - Jun 27, 2008 - 1:03 PM
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The advance figure for inflation in Spain, as released by the National Statistics Institute this morning has jumped to 5.1%, up 0.4% over the month. It’s an all-time high for the number which is double that registered for June last year. It’s also the first time that the number has broken through the psychological barrier of 5%.
The increased price of petrol and some other raw materials on the international markets remain the main cause of the inflation, and it takes Spain even further away from the objective of the European Central Bank of a 2% inflation level.
The price of petrol is meanwhile expected to reach 170 $ this summer, according to OPEC President, Chakib Jelil.
The European Central Bank is now expected to increase interest rates next Thursday by a quarter of a point to 4.25%, while the Governor of the Bank of Spain, Fernández Ordóñez has said he does not expect that to be the first in a series of increases.
A sharp fall in consumer spending is reported to be hitting small shop owners in particular, while the large stores are less affected. Small shop sales were down by 5.3% in May with non-essential home products being particularly affected. It’s the second largest fall in three months, after March saw an 8.7% reduction.
Companies are to use July to issue dividends to many investors. Some of the large firms in Spain planning to issue payments before the summer break are BBVA, Iberia, Banco Popular and Gas Natural.
Blocks of flats was the housing form most affected by a slow down in new construction registered in Spain between January and April this year. Visas were issued for 33,253 new homes, 44% down for the same period last year. Real estate promoters now estimate the real demand for flats this year to be 450,000 units across Spain.
Some positive news with families in Spain actually spending more on tourism. The increase of just over 7% comes thanks to more people taking short weekend trips away. An industry survey says that the first quarter saw growth in the sector of 24.5%
And finally,
Don’t forget that Monday is the deadline for the presentation of your income tax forms for last year.