Spain Business
Spain Business Brief - Wednesday August 27 2008
By h.b. - Aug 27, 2008 - 7:31 PM
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The Government has denied that Spain has entered into recession while the opposition Partido Popular is already talking of ‘a black economic summer’. However the cabinet has admitted that consumer spending is at it’s lowest level since 1994 and that recovery will be ‘difficult’. The summer sales have not compensated for the fall in sales over the season.
The topic has taken centre stage following the revelation that the GDP grew by a single tenth of a point between April and June, and a report from S&P which is forecasting negative growth, ie recession, in the next quarters for Spain.
The INE National Statistics Institute has confirmed that the growth for the second quarter of 0.1% takes the annual rate to 1.8%, the lowest level since the first quarter of 1996.
The new numbers show that domestic demand has fallen from a growth of 4.9% to 1.5% in a year.
Latest numbers show that despite the credit crunch the Spanish are travelling more. The number of trips take in the year to May was up 13.4% compared to last year, but this year more Spaniards are deciding to holiday in Spain. National destinations saw a 14% increase in domestic visitors while the number of foreign travellers was up only 4.8%.
Interestingly zoos, aquariums and nature parks have been doing well, up 10% on the year when compared to water parks which saw visitor numbers down by 0.8%.
General Motors have announced that they are to reduce their production in Spain to save costs. The company’s plant at Figuerelas, with a staff of 7,500, currently produces some 2,000 Combo, Meirca and Corsa cars a day and exports 90% of its production. The company wants to stop production for six days and has informed unions of that wish.
The IBEX 35 ended the day today close to 11,500 points thanks to a rally seen on Wall Street. The Spanish market recovered 0.52% to 11,479.