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Spain Business Brief - Tuesday June 24 2008
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By h.b. - Jun 24, 2008 - 1:42 PM
Photo Typically Spanish
80% of the state surplus has now been spent because of the real estate and oil price crisis. Carlos Ocaña, Secretary of State for Hacienda, said that for the year to May they had seen a surplus in the state budgets of just 2.722 billion – 0,24% of GDP. That compares to the 13.592 billion for the same period last year.
Income from IRPF income tax was up 9.8% on the year, but income from IVA and company taxes fell by 17.8% and 19.7% respectively.
Net income was 82.445 billion, 4% less.
The Minister for Employment and Immigration, Celestino Corbacho, has said today that unemployment will be closer to 11% than 10% next year. The unemployment rate currently is 9.6%. He also said the increase in the numbers affiliated to the Social Security system would be lower than seen for the same months in previous years. Corbacho said that Spanish pensions were ‘plainly guaranteed’ although he added that it would be necessary to reflect on the future of 30-40 years.
The Governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, has been speaking to Congress today and has said that he considers the measures announced this week by the Prime Minister to face the crisis are not sufficient. The Governor is calling for a reform of the labour market and a change in collective negotiation so that salary increases are not linked to inflation. He called for greater austerity from the Regional Governments in Spain.
Minister for the Economy, Pedro Solbes, has said that the Government would have reconsidered measures such as the 400 € tax reduction, if they had known they would be facing the current economic circumstances before the election. It comes as the Government thinks that the Spanish economy will grow this year by less than 2%.
The Prime Minister will have to give a statement to Congress on the economic situation, following a vote today from the PP, IU, PNV and ERC, with a special debate on the economy to be arranged in the near future.
The sale of new property in Spain for the first quarter of this year has come in at 12.9% down on last year for the same period at 89,543 properties. Total sales of all property over the time were 31% down at 157,539.
Foreign residents acquired 25.9% fewer properties and non-residents 46.5% fewer. Most real estate deals in the quarter took place in Madrid, Murcia and Barcelona.
Meanwhile real estate company Afirma says it will see losses until 2010 because of the fall in the housing market.
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Spain Business
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