Spain Business
Spain Business Brief - Friday July 25 2008
By h.b. - Jul 25, 2008 - 1:36 PM
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The Spanish Government yesterday reduced its prediction for the growth of the Spanish economy to 1.6% for this year and just 1% for 2009. This year’s number is 0.7% lower than the 2.3% forecast made in April this year.
Minister for Tax and the Economy, Pedro Solbes, said that a progressive worsening of the macro-economic data of higher food, raw materials, and crude prices, had led the Government to make the change, and that they were now expecting unemployment to reach 10.4% this year and 12.5% next.
The Survey of the active population has placed unemployment in Spain already over 10% at the highest level since 2004.
The latest CIS poll of what concerns the Spanish people highlights that the economy is now top of worries. It is followed by unemployment and then by immigration and terrorism.
While the Martinsa-Fadesa company is postponing and re-negotiating its debts, those individuals who have opted to buy a home from the company have to continue making their payments on time – upto 3,000 € a month in some cases. The money is going for a home which nobody can guarantee will be completed. Add to that in some cases it has been revealed the company has been accepting payments for homes which are not yet under construction and for which they have no licence to build.
It has also been revealed that of the 16,000 homes which Fadesa had on sale at the end of last year, Martinsa had removed 4,000 from the market, considering that should never have been sold because of possible real estate irregularities.
Telesp, the Brazilian affiliate of Telefónica, has announced a 6% fall in its profits for the first half of the year at 711 million dollars. The numbers are distorted by the sale of some land last year, with the number internet clients increasing over the year by 26.7%.
La Caixa savings bank has announced a 13% reduction in profits in what they say was a strange first half of the year marked by a lack of extraordinary results. Profits came in at 1.06 billion €. The company has earmarked 225 million for bad debts and donations, and that includes 134 million for its exposure to risk from the Martinsa-Fadesa company.
And finally,
Speculation in the British press today that J.P.Morgan Chase investment bank has started contacts with several entities which may be interested in buying shares in the British bank HBOS. Among those reported to have been approached is the Banco Santander, according to the Daily Telegraph today.
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