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Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
Spain Economic Outlook 4Q12
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Spain Economic Outlook 4Q12

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After the slowdown in 2012, global growth will gradually speed up from the end …

After the slowdown in 2012, global growth will gradually speed up from the end
of the year and during 2013, thanks to the monetary measures in developed
economies and those supporting growth in emerging economies
The risk scenarios are less likely that they were three months ago, if the
agreements are upheld and the measures are applied in the developed
countries, although there are still considerable challenges to be faced in the
Eurozone and in the US.
Emerging economies face the challenge of managing inflows
Spain: Spain is still expected to contract in 2012 and 2013, but the decline has
been less intense in the third quarter
The fiscal measures are bearing fruit but the recession is delaying meeting the target
Implementation of structural reforms is more necessary than ever before

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  • 1. Situation and Outlook for theGlobal Economy and for Spain6 November 2012
  • 2. Outlook for Global Economy and SpainKey themes1 After the slowdown in 2012, global growth will gradually speed up from the end of the year and during 2013, thanks to the monetary measures in developed economies and those supporting growth in emerging economies2 The risk scenarios are less likely that they were three months ago, if the agreements are upheld and the measures are applied in the developed countries, although there are still considerable challenges to be faced in the Eurozone and in the US.3 Emerging economies face the challenge of managing inflows4 Spain: Spain is still expected to contract in 2012 and 2013, but the decline has been less intense in the third quarter5 The fiscal measures are bearing fruit but the recession is delaying meeting the target6 Implementation of structural reforms is more necessary than ever before Page 2
  • 3. Outlook for Global Economy and SpainIndexSection 1Global economy:gradual acceleration backed by economic policiesSection 2Spain: the economy continues to adjust, fiscal efforts are bearing fruit and the agenda ofreforms is more necessary than ever before Page 3
  • 4. Outlook for Global Economy and SpainGradual acceleration of the global economyGlobal GDP growth (%)Source: BBVA Research 6 5.1 6 Global growth is gradually picking up thanks to 5 3.9 5 economic policy measures 3.2 3.5 4 2.8 4 3 3 2 2 In particular, due to monetary measures in developed 1 1 economies and those supporting growth in developing countries 0 0 -1 -1 -0.6 -2 -2 2008 2009 2010 2011 2012 (f) 2013 (f) The tail risk scenarios are currently less probable than three months ago… Advanced economies Emerging economies Baseline Oct-12 Baseline Jul-12 … if the agreements are upheld and the proposed measures are applied, although there are still serious risks Page 4
  • 5. Outlook for Global Economy and SpainGrowth remains very heterogeneousGDP growth by area (% yoy)Source: BBVA Research A three-speed world 8 Emerging markets: high growth 6 5.8 with a slight slowdown 5.2 4 3.2 3.5 US: slow recovery 2.1 1.8 2 0.3 0 Eurozone: slow, disparate, and vulnerable recovery, with doubts as to the effects of fiscal consolidation on -0.5 growth -2 2012 2013 2012 2013 2012 2013 2012 2013 World USA Eurozone Eagles Aug-12 Nov-12 Page 5
  • 6. Outlook for Global Economy and SpainRisk factors ECB: “whatever it takes” to preserve the euro (Outright Monetary Transactions, or OMT) Base scenario Risk scenario (lower likelihood) The ECBs decision means that the base scenario is rather more probable provided that the agreements are implemented efficiently “Fiscal precipice” in the US Other global risks Slowdown in China and in other emerging economies Page 6
  • 7. Outlook for Global Economy and SpainThe potential of monetary policies in the US and EMUEurozone: business expectations and financial stress* US: business expectations and financial stress*Source: BBVA Research and Markit Source: BBVA Research and Markit 60 -,600 64 -,400 56 ,00 60 ,00 52 ,600 56 ,400 48 1,200 52 ,800 44 1,800 40 2,400 48 1,200 May-10 Sep-10 May-11 Sep-11 May-12 Sep-12 Jan-10 Jan-11 Jan-12 May-10 May-11 May-12 Jan-10 Jan-11 Jan-12 Sep-10 Sep-11 Sep-12 Eurozone PMI Eurozone FSI (inverse scale) US PMI US FSI (inverse scale)BBVA Research financial stress index (FSI): credit risk (5-year CDS, CDS and financial debt of non-financial companies), volatility (shares, interest rate andexchange rate) and liquidity tension (interbank rate spread and the 3-month risk-free rate) measures. Page 7
  • 8. Outlook for Global Economy and SpainEurope on the move Three positive events have opened a new window of opportunity The ECB announced a new bond purchase programme (OMT): an “European-style” lender of last resort that will operate under fiscal conditionality The German Constitutional Court backed the commitment to the ESM, which is now ready to intervene (with up to EUR200Bn) Single banking supervision is pressing ahead, although slower than expected Page 8
  • 9. Outlook for Global Economy and SpainWill Europe seize this opportunity?Spain and Italy: yield on 10-year bond (%) ECB,Source: BBVA Research and Haver The euro is October summit Greek elections not irreversible. 7.5 leaves doubts on decisive. Risk of Massive Greece. EFSF fund Greek exit bond 7.0 allocation ineffective ECB purchases purchases if French-German Spanish and conditions 6.5 agreement on PSI Italian debt are there 6.0 5.5 Establishment of the EFSF 5.0 4.5 4.0 First LTRO Growing concern about 3.5 of the ECB Spain (banking, fiscal, reform) 3.0 Feb-10 Mar-10 May-10 Feb-11 Mar-11 May-11 Feb-12 Mar-12 May-12 Jun-10 Jun-11 Jun-12 Apr-10 Apr-11 Apr-12 Jan-10 Jan-11 Jan-12 Sep-10 Oct-10 Dec-10 Sep-11 Oct-11 Dec-11 Sep-12 Oct-12 Jul-10 Nov-10 Jul-11 Nov-11 Jul-12 Nov-12 Aug-10 Aug-11 Aug-12 Spain Italy Page 9
  • 10. Outlook for Global Economy and SpainThe European financial scenario has improved …Change in two-year public debt yields since Draghispeech (bp)(Last data: 5 November 2012)Source: BBVA Research and Bloomberg There are capital inflows into the Eurozone, for both 100 fixed income and equities 50 0 The lower risk aversion has encouraged some corporate debt issues in the Eurozone -50-100 Demand for Spanish public debt on the secondary-150 market by non-residents is reappearing-200-250 Spanish banks and non-financial companies have again issued debt-300-350-400 Germany France Ireland Italy Spain Portugal Page 10
  • 11. Outlook for Global Economy and Spain… although there are still considerable challenges The fragmentation of the financial markets is stimulated by national legislation, which must be avoided with banking unionChange in the interest rate on new bank loans TARGET2 position with respect to the Eurosystem(pb, December 2010 to July 2012) asset position(+) and liability position(-) (EUR Bn)Source: ECB, IMF and BBVA Research Source: BBVA Research and Central Banks 140 900 800 120 IT 700 100 600 500 PT 80 400 300 Households loans SP 60 200 CY 100 IRE 40 0 FR -100 20 -200 -300 0 -400 NTH AU -500 FI BE -20 May-07 May-08 May-09 May-10 May-11 May-12 Jan-07 Sep-07 Jan-08 Sep-08 Jan-09 Sep-09 Jan-10 Sep-10 Jan-11 Sep-11 Jan-12 Sep-12 -40 GER -60 -80 -60 -40 -20 0 20 40 60 80 100 Germany Spain Corporate loans Page 11
  • 12. Outlook for Global Economy and SpainUS: QE3 offsets downside risksUS.: GDP growth (yoy)Source: BBVA Research and BEA 2.5 US is trying to tackle political and fiscal uncertainty 2.1 with monetary policy 2.0 1.8 Growth close to 2%. The “moderate” fiscal adjustment 1.5 is offset by QE3, while the effects of hurricane Sandy will be relatively small 1.0 The improvement in conditions in the real estate sector 0.5 does not counter weak external demand 0.0 2012 2013 The "fiscal precipice" and the European crisis are the US main concerns for the US Nov-12 Jul-12 Page 12
  • 13. Outlook for Global Economy and SpainQE3: monetary expansion "as long as is necessary" Monetary stimulus until the unemployment rate drops by close to 6%* US: estimated impact of QE3 and extension of theQE3 and extension of the period of interest rates monetary policy forecastat minimum levels (p.p., with respect to the scenario without policy changes by the Fed. OEF model)Source: BBVA Research Source: BBVA Research (% GDP) 1.4 1.424.0 4.0 New 1.2 1.218.0 3.0 1.0 1.0 Higher liquidity (Left Axis) 0.8 0.812.0 2.0 Previous 0.6 0.6 0.4 0.4 6.0 1.0 0.2 0.2 0.0 0.0 0.0 0.0 Extended period of minimum rates (Right Axis) -0.2 -0.2 -6.0 -1.0 2012 2013 2014 2015 2016 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 GDP growth Unemployment rate (pp, inverted) Inflation* J. C. Williams (Chairman Fed San Francisco) Page 13
  • 14. Outlook for Global Economy and SpainThe global impact of QE3Global impact of QE3 and extension of the period of lowrates in the US (commerce)Source: BBVA Research World 2012 2013 2014 2015 2016 The positive momentum of activity in the US is transmitted to the rest of the world not only through Growth 0.0 0.1 0.2 0.4 0.3 commerce Inflation 0.0 0.0 0.1 0.2 0.4 It also encourages greater capital inflows and falls inRanking of impact by area the risk premium in emerging economies Ranking GDP growth Inflation1 Emerging Asia Emerging Asia The challenge for Europe is to avoid lagging behind this2 Latin America Latin America improvement in global growth3 Eurozone EurozoneNote: with no change in the global risk premium. Deviations in p.p., with respect tothe scenario without policy changes by the Fed. OEF model. Page 14
  • 15. Outlook for Global Economy and SpainThe impact of QE3 on a typical emerging economy*Impact on economic growth Impact on inflation(pp on base case scenario) (pp on base case scenario)Source: BBVA Research Source: BBVA Research 1.2 1.2 1.0 1.0 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0.0 0.0-0.2 2012 2013 2014 -0.2 2012 2013 2014 Trade channel Trade channel Trade + risk premium channels (flexible) Trade + risk premium channels (flexible) Trade + risk premium channels (activism) Trade + risk premium channels (activism)* Used as a benchmark to calculate the impact on an emerging economy that is sufficiently open to the outside world both commercially and financially Page 15
  • 16. Outlook for Global Economy and SpainIndexSection 1Global economy:gradual acceleration backed by economic policiesSection 2Spain: the economy continues to adjust, fiscal efforts arebearing fruit and the agenda of reforms is more necessary thanever before Page 16
  • 17. Outlook for Global Economy and SpainMain changes in the scenario Drivers of the economic scenario Source: BBVA Research Growth forecast 3 months ago 2012: -1.4% 2013: -1.4% Marginal deterioration in growth prospects in Europe for 2012 Downward revision of historical data of the National Accounts New factors Fiscal consolidation: deviation from the 2012 target is more likely 2Q12 data in line with our expectations and 3Q12 better than expected The risk premium and capital flows are an improvement on the forecasts from three months ago Structural reforms 2012 and 2013 growth forecasts still intact 2012: -1.4% 2013: -1.4% Page 17
  • 18. Outlook for Global Economy and Spain1. Adjustment of the imbalances continuesTrends in GDP in real terms during periods ofproperty market crisis (t=100)Source: BBVA Research from Haver data 120.0 The Spanish economy is correcting accumulated 115.0 imbalances 110.0 105.0 100.0 The largest of these imbalances is found in the real- 95.0 estate sector 90.0 85.0 80.0 The downturn in activity in Spain (and in other t t+1 t+2 t+3 t+4 t+5 t+6 t+7 t+8 t+9 t+10 t+11 t+12 t+13 t+14 t+15 t+16 t+17 t+18 European countries) seems to have been greater and recovery slower than in other occasions Min Max SPA (current crisis) Previous crisis average* Current crisis average (GBR, DNK, IRE, NLD)**Note: t is the period in which the price hit its peak* Refers to real estate market crises in the sample that have already concluded** Refers to real estate market crises in the sample that are still ongoing Page 18
  • 19. Outlook for Global Economy and Spain2. Still in recession but the decline is stabilisingSpain: real GDP growthand forecasts based on MICA-BBVA model (%, qoq)Source: BBVA ResearchCurrent forecast: 5 November 1.0 1.0 In 3Q12, the Spanish economy remains in recession… 0.5 0.5 0.0 0.0 … although the contraction was smaller than was forecast three months ago -0.5 -0.5 Available data indicate that growth in 4Q12 is likely to -1.0 -1.0 remain negative, although not as severely as we had foreseen -1.5 -1.5 4Q09 3Q10 3Q12 3Q11 2Q10 2Q12 2Q11 2Q09 3Q09 1Q10 1Q12 1Q11 4Q10 4Q12 4Q11 Employment will continue to be hindered by the CI at 20% negative outlook for growth CI at 40% CI at 60% Point estimate MICA-BBVA Data (BBVA Research forecast fo 4Q12) Page 19
  • 20. Outlook for Global Economy and Spain2. Still in recession but the decline is stabilisingSpain: changes in the breakdown of the growthforecasts for 2012 and 2013Source: BBVA Research, using Consensus Forecast data 90.0 The uncertainty about growth prospects in 2012 has 80.0 decreased 70.0 Relative frequency 60.0 50.0 Before the summer, 28.6% of institutions expected a 40.0 contraction of over 2.1% in 2012 30.0 (50% between 1.4% and 1.8%) 20.0 10.0 0.0 Now, just 13.0% forecast a contraction of over 2.1% (86.7% between 1.4% and 1.8%) (-2,8; -2,5) (-2,5; -2,1) (-2,1; -1,8) (-1,8; -1,4) (-1,4; -1,1) (< -2,8) (> -1,1) Forecast annual growth (%) 2012: June-2012 (Average: -1,6% ) 2012: October-2012 (average: -1,6%) 2013: October-2012 (average: -1,6%) Page 20
  • 21. Outlook for Global Economy and Spain3. Exports continue to be the main supportSpain: exports of goods and services of large firms(in real terms, % yoy) What can be behind this positiveSource: BBVA Research based on Datacomex data surprise? 30.0 Positive trend in Spanish exports, especially to 20.0 emerging countries 10.0 Lower impact of fiscal consolidation or greater 0.0 bringing forward of spending due to VAT increase -10.0 Results of the Supplier Payment Plan better than -20.0 expected -30.0 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Dec-08 Dec-09 Dec-10 Dec-11 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Short-term impact of the labour market reforms greater than expected Total Third countries EU Page 21
  • 22. Outlook for Global Economy and Spain3. Exports continue to be the main supportCumulative change in global export share and The Spanish puzzle: factors linked torelative export pricesGoods and services, 1999-2011. Source: BBVA Research based on European Commission and OMT data the business enviroment 30 CAN Unlike other countries, between 1999 and 2011 IT GR 20 Spains share of exports barely fell by 8.9% SP Change in REER (%) DEN 10 NTH PT If the effect of relative export prices were eliminated, IRE 0 the Spanish share would have increased FR SWE AT FIN GER -10 UK The prices are important, but other factors in the US business environment are more so JP -20 -30-45 -40 -35 -30 -25 -20 -15 -10 -5 0 Change in the global export share (%) Page 22
  • 23. Outlook for Global Economy and Spain4. Improvement in risk premium and capital flowsSpain: Balance of payments and capital flows The announcements by the ECB have(Cumulative 12-month, % of GDP)Source: BBVA Research, based on Bank of Spain data contributed to: 40 4 35 35 34 30 34 29 3 Preventing a systemic risk event from occurring 25 26 20 2 15 10 1 5 Ensuring the functioning of the monetary policy in 0 0 -5 the Eurozone-10 -1-15-20 -2-25 Reducing the upward pressure on the risk premium-30 -3-35 and capital flows in Spain-40 -4 Jul-11 Sep-11 Oct-11 Jan-12 Mar-12 Jul-12 Feb-12 Jun-12 Sep-12 (e) Aug-11 Nov-11 Dec-11 Apr-12 May-12 Aug-12 Oct-12 (e) Reducing risk aversion: there has been a limited Eurosystem Rest reopening of private debt markets FDI inflows Current Account (rhs) (calculated as a residual) Page 23
  • 24. Outlook for Global Economy and Spain5. A significant fiscal adjustmentPublic Administrations: breakdown of the publicdeficit excluding aid given to the financial system (%GDP)Source: BBVA Research, based on MINHAP data Fiscal consolidation is working: fiscal efforts in 2012 will be over 4pp of GDP The economic downturn is invariably delaying the achievement of the nominal target … … although at the current pace and with consistent fiscal adjustment, structural balance would be achieved in 2014 Overall, there are still major reforms to be undertaken, that would increase the efficiency of the public authorities Page 24
  • 25. Outlook for Global Economy and Spain5. A significant fiscal adjustmentSpain: fiscal adjustment and GDP growthSource: BBVA Research based on INE data 5 In 2011, the Spanish economy grew 0.4% despite the contractionary fiscal policy4 3 Despite the unprecedented adjustment to public accounts in 2012 (fiscal efforts of 4.3pp of GDP), the 2 economy will contract around 1.4% 1 Debate on fiscal multipliers0-1-2 2011 2012 2011 2012 Fiscal effort (pp of GDP) GDP growth % Page 25
  • 26. Outlook for Global Economy and Spain6. The restructuring of the financial systemCapital requirements of financial institutions in theadverse scenario* (EUR Bn)Source: Bank of Spain 30 One more step has been completed in the bank € 59Bn restructuring 20 10 0 -10 Recapitalisation plans: EUR40Bn euros -20 in forecast public capital injections -30 Grupo Santander NCG Banco BBVA Bankinter Banco de Valencia Bankia-BFA Caixabank+Cívica Kutxabank Unicaja Ibercaja Catalunyabank Caja3 Liberbank Sabadell+CAM BMN CEISS Popular The diverse nature of the system has been confirmed: the solvent institutions have 70% of the assets Process of transferring assets to the Asset Management Company (Sareb), with discounts to attract private capital and not consolidate as public debt* Does not include mergers under way or fiscal credit (with it EUR54Bn) Page 26
  • 27. Outlook for Global Economy and Spain7. Agenda of reforms: more necessary than everProductivity: gross added value by hour worked, The challenge is to create jobs andindicators by volume, 1995=100Source: BBVA Research, using EU KLEMS data reduce the productivity gap130 In the expansion, Spain increased its productivity gap compared to the main economies120 Until the current economic crisis, aggregate110 Spain productivity barely grew by an average of 0.6% per year100 Growth in productivity facilitates the sustainability of public accounts, private sector deleveraging and internationalisation 90 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 USA UK GER FR EU15 SPA ITA Page 27
  • 28. Outlook for Global Economy and Spain7. Agenda of reforms: more necessary than everRegulation and growth in productivity in the Productivity in the services sector is keyretail sectorSource: BBVA Research based on EUKLEMS and OECD data 6 SWE Competitive services are a necessary condition to achieve productivity gains Real productivity growth annual average 5 IR KOR USA 4 FIN The indicators of regulation in the retail sector take RU into account entry barriers, operating restrictions and 1995-2007 price control 3 GR Better sectorial regulation is associated with greater 2 NTH SP productivity gains AT PT BEL IT JP 1 GER FR 0 0 1 2 3 4 5 Average regulation degree (low (1) high (5)) Page 28
  • 29. Outlook for Global Economy and Spain7. Agenda of reforms: more necessary than everRegulation and growth in productivity in the Productivity in the services sector is keybusiness services sectorSource: BBVA Research based on EUKLEMS and OECD data 6 Regulatory improvement and the professionalisation IR of business services (programming, information 5 services and other business services) … RU Real productivity growth annual average 4 3 … would not only foster the productivity of the sector USA. but would also have a significant external impacts … 2 JP 1995-2007 SWE 1 NTH BEL FR SP FIN … on the productivity and internationalisation of 0 GR companies in the other sectors AT -1 PT IT GER -2 KOR -3 -4 0 1 2 3 4 Average regulation degree (low (1) high (5)) Page 29
  • 30. Outlook for Global Economy and SpainKey themes1 After the slowdown in 2012, global growth will gradually speed up from the end of the year and during 2013, thanks to the monetary measures in developed economies and those supporting growth in emerging economies2 The risk scenarios are less likely that they were three months ago, if the agreements are upheld and the measures are applied in the developed countries, although there are still considerable challenges to be faced in the Eurozone and in the US.3 Emerging economies face the challenge of managing inflows4 Spain: Spain is still expected to contract in 2012 and 2013, but the decline has been less intense in the third quarter5 The fiscal measures are bearing fruit but the recession is delaying meeting the target6 Implementation of structural reforms is more necessary than ever before Page 30
  • 31. Situation and Outlook for theGlobal Economy and for Spain6 November 2012
  • 32. Outlook for Global Economy and SpainOutlook for 2012-2013Spain and Europe: macroeconomic forecastsSource: INE, Bank of Spain, Eurostat and BBVA Research forecasts 2009 2010 2011 2012 (f) 2013 (f)(Yoy growth rate) Spain EMU Spain EMU Spain EMU Spain EMU Spain EMUFCE, Homes -3.9 -0.9 0.6 0.9 -0.8 0.1 -2.1 -1.0 -2.9 0.0G.C.F AA.PP 3.7 2.6 1.5 0.7 -0.5 -0.1 -3.6 -0.1 -6.9 -0.5Gross fixed capital formation -18.0 -12.7 -6.2 -0.3 -5.3 1.6 -9.7 -3.6 -7.5 -0.6 Equipment, machinery and cultivated assets -23.9 -18.7 2.6 6.3 2.3 4.2 -7.6 -5.3 -3.7 -0.8 Equipment and machinery -24.5 -18.8 3.0 6.4 2.4 4.3 -7.7 -5.3 -3.8 -0.8 Construction -16.6 -9.9 -9.8 -4.4 -9.0 -0.2 -11.8 -3.4 -10.0 -1.4 Housing -23.1 -12.5 -10.1 -2.9 -6.7 0.9 -6.8 -1.9 -8.4 0.4 Other buildings and other constructions -9.1 -7.0 -9.6 -5.9 -11.0 -1.4 -16.3 -5.1 -11.7 -3.3 Change in inventories (*) 0.0 -0.9 0.1 0.6 -0.1 0.1 0.0 -0.5 0.0 0.0Domestic demand (*) -6.6 -3.6 -0.6 1.2 -1.9 0.5 -4.0 -1.8 -4.7 -0.3Exports -10.0 -12.4 11.3 11.0 7.6 6.4 3.8 3.1 8.2 3.2Imports -17.2 -11.0 9.2 9.4 -0.9 4.2 -4.7 0.1 -1.8 2.2Net trade balance (*) 2.9 -0.8 0.3 0.7 2.3 1.0 2.6 1.3 3.3 0.5GDP at mp -3.7 -4.3 -0.3 1.9 0.4 1.5 -1.4 -0.5 -1.4 0.3Pro-memoriaGDP w/o housing investment 0.5 -3.8 0.5 2.2 1.0 1.5 -1.0 -0.4 -0.9 0.3GDP w/o construction 1.6 -3.6 1.6 2.7 2.1 1.7 0.3 -0.2 -0.2 0.4Employment (LFS) -2.3 -1.8 -2.3 -0.5 -1.9 0.5 -4.4 -0.8 -3.4 -0.3Unemployment rate (% active pop) 20.1 9.6 20.1 10.1 21.6 10.2 25.0 11.4 26.1 11.8Current account balance (% of GDP) -4.5 0.1 -4.5 -0.1 -3.5 0.0 -1.4 1.2 -0.5 1.2Debt (% GDP) (**) 61.3 79.6 61.3 85.5 69.1 87.3 85.2 89.5 96.2 90.4Public sector balance (% of GDP) (**) -9.7 -6.3 -9.7 -6.2 -9.0 -4.1 -7.2 -3.2 -5.9 -2.3CPI (average period) 1.8 0.3 1.8 1.6 3.2 2.7 2.5 2.5 2.3 1.8CPI (end of period) 3.0 0.4 3.0 2.0 2.4 2.9 3.5 2.4 1.3 1.6(*) contribution to growth(**) excluding in Spain aid to the banking sector Page 32

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