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The slowdown is being more acute than expected, with a more profound impact on the Spanish economy than estimated initially. So concludes the National Institute of Statistics (INE) yesterday published the review of the growth series of the Gross domestic Product (GDP) from 1995 to 2018, following the indications of the European Union, whose states are following a similar process. In this way, the GDP, resulting in an economy in a year, grew by 2.4% in 2018, that is, two tenths less than estimated in the beginning. The Spanish GDP is in 1.202.193 million euros, 6.055 less than in the previous forecast .
This review confirms that the activity is on a lower level than thought, which contrasts with the Government’s intention, already hinted at in recent weeks by the minister of Economy, Nadia Calviño, improve the growth forecast for 2019, now at 2.2%. Already in the second quarter the annual growth was 2.1%, two tenths less than estimated initially. Because the patch also changes the entire quarterly series: the GDP grew by 0.7% in the first quarter but a 0.5% , the same percentage that in the following period. This year, the GDP was 2.298 million euros less than planned in the beginning.
Less consumption and more investment
The deterioration in the new calculation is due, primarily, to ensure that domestic demand contributed far less than what the INE calculated in the first place: instead of growing by 2.9% as it was thought in the beginning, did 2.6% in 2018. The great reason of this worsening can be explained by the evolution of expenditure of households and of the administrations, two of the great engines of the activity, it was lower than expected.
households boosted their consumption in 2018 1.8%, five tenths less than expected, while the public sector spent 1.9% more than in 2017, when before it was estimated that the advance had been two tenths higher.
The correction is partly that from 2016, building on this review, the INE has added the data from the Survey of Family Budgets.
For its part, the investment measured by the gross capital formation grew by 6.1%, five tenths more than in the previous series. As this heading does not have as much weight as the previous two, the review results in a clipping of the estimation of 2018.
As a waterfall effect, this change will also affect other stats, in which will result in an upward revision of the deficit and the public debt in relation to GDP in the next few weeks shall communicate to the Bank of Spain and the Ministry of Finance. The deficit, which closed 2018 at 2.5% of GDP, just vary a few hundredths, point from the Treasury.
of 500,000 jobs less
The level of employment is also slimming with the new prism of the INE, cut about 500,000 jobs equivalent to full-time the level of current occupancy, up to 17,944 million employees. And also slackening off the wage bill, which now amounted to 544.579 million in 2018, 21.121 million less.
The new image that you draw the INE sheds a new fresco of the last 25 years of Spanish economy. In the new series of the INE it turns out that you grew somewhat less in the years of the “boom” , the crisis was most intense calculated in its time, and that the recovery was higher, but slowing, also. The last three years grew by less than estimated: in 2016, and in 2017 the review is from two and one tenth less, at 3% and 2.9% respectively. In 2015, however, grew 3.8%, two tenths more than what was calculated in your time.
In the years of the crisis, the recession was also different to what you predicted at the time: in 2013 the fall in GDP was 1.4% (not 1.7% as previously thought). Something similar happens in 2011 (down 0.8% and not 1%), but in 2012 the destruction of activity was greater (the GDP shrank by 3% and not 2.9%), as also happened in 2009 (with a 3.7% drop and not 3.6%).
