Spain Business
Spain Business Brief - Monday January 5 2009
By h.b. - Jan 5, 2009 - 1:20 PM
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Inflation in Spain has ended the year at 1.5%, the lowest rate for ten years, according to the advance figure just released by the INE, the National Statistics Institute.
Minister for the Economy, Pedro Solbes, forecast that the annual inflation rate would be 2% at the end of the year.
The main reason the index has fallen so dramatically from its high of 5.3% in July is the fall in the price of petrol, together with businesses price-cutting in the face of the economic slowdown.
The latest index for consumer confidence shows that it is stuck on pessimist. The ICO index rose slightly from 48.7 to 48.9 in December, but is still close to its all-time low.
Meanwhile the ICO offers its new credits for small and medium size businesses from Jan 7. The credits are for payments such as for power, raw materials and wages.
The increasing debt has lead to a fall in confidence on the markets for Spanish public debt, and this has lead the Spanish government to, for the first time since entering the Euro, offer a bond with a return which is 83 basic points more than its German equivalent.
The latest numbers for the price of newly built housing, as supplied by the Sociedad de Tasación, has shown prices have fallen in the provincial capitals of the country by 6.6% over the year. A 100 square metre home now costs on average 271,200 €. The fall compares to an increase of 5.1% in the previous year.
The car industry in Spain is demanding 10 billion € in aid saying that falling sales last year have already put 68,000 jobs at risk. 9% of the population is employed directly or indirectly in car manufacture in the country and the industry generates 5% of the country’s wealth.
A poll by Sigma Dos for El Mundo newspaper, has shown that 63% of the Spanish people think that the economy will be worse in 2009 than last year. Just under half those questioned admitting purchasing fewer Christmas presents this year, 36% say they don’t go to the cinema so much, 43% said they were eating out less, and 37.4% said they were taking fewer trips.