Spain Business Brief - Tuesday June 23 2009
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By h.b. - Jun 23, 2009 - 1:10 PM
A whole range of large numbers and stats on the economy today

Spain has seen an accumulated deficit in state accounts for the year to May of 19.543 billion €. The number compares to a surplus of 2.957 billion for the same period in 2008.
This year saw a 15.7% fall in income at 69.482 billion €, while costs rose over the period by 14.2% to 64.782 billion.
Income from VAT/IVA fell by 30%, and from income tax by 14.6%.
It’s a tripling of the state deficit in a month, and ends May at 1.78% of G.D.P. The Government has admitted the situation cannot continue in the long term, but maintains the claim that the Social Security account will end the year in the black.

Meanwhile the Social Security surplus has fallen by 26.6%. Income here was 50,85 billion, down 1.3% while payments were 40.08 billion, up 8.8%.

The number of foreigners signed up to the Spanish social security system meanwhile has increased for the fourth consecutive month in May. It rose by 29,831 people over April to reach 1,917,223, according to the Ministry for Employment. The total number of people paying into the social security system in Spain was also up in May by 69,304.

The Governor of the European Central Bank, Jean-Claude Trichet, has made a call for Spain to moderate salaries and to make sackings less costly. His comments support the employers organisations here which have been calling for similar measures for sometime. Trichet also said he wanted to see the aid tap turned off in Spain.

A new government report on the state of the economy has said that the economy will start to recover in the first quarter of 2010. The report speaks of a ‘relatively quick’ reactivation of the economy, thanks to exports and investments made in equipment, among other factors.
It forecasts shrinkage in the economy of 3.6% this year and of 0.3% next.

Latest EU numbers show that Spain is still the country to take the second lowest amount in tax on consumer spending in the Eurozone. The tax take here is 15.9% of family spending, while the Eurozone average is 21.5%.

The Euribor rate has meanwhile marked a new low to stand at 1.585%, while the average for this month is 1.635% - it’s lowest level ever.

The Government is reported to be considering cancelling the 400 € income tax rebate it has been giving to employed and self-employed workers, as well as pensioners, for the past year.
The news was given by the Secretary of State for Hacienda and Budgets, Carlos Ocaña, who commented that all options are open. He confirmed the Government was not planning any tax changes this year, but it would be revising the fiscal framework in 2010, admitting that the public accounts are worse than expected.

The number of hotel overnight stays has fallen this year in Spain despite the fact that many establishments have been offering lower prices. Numbers for May show prices down 5% compared to last year, while the number of overnight stays was 9% down. It follows the announcement yesterday of a 12% reduction in the number of foreign tourist visitors to Spain in the year to May.

Finally,
The summer sales campaign is already underway in Madrid, with some clothing stores offering historic discounts of upto 70%. Experts say the companies want to clear their stock quickly and obtain liquidity so they can face due payments.

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