Monthly summary of the state of the Spanish and international economy.

1. Source: Círculo de Empresarios based on Ministry of Labour, Migrations
& Social Security, 2019
Source: Círculo de Empresarios based on INE, 2019
19.4
16.4
19
14
15
16
17
18
19
20
-1
0
1
2
3
4
Q1
2016
Q2
2016
Q3
2016
Q4
2016
Q1
2017
Q2
2017
Q3
2017
Q4
2017
Q1
2018
Q2
2018
Q3
2018
Q4
2018
2019 2020
Domestic demand External demand Spain GDP Euro area GDP
-6.2
-12
-10
-8
-6
-4
-2
0
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
5.000.000
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Unemployment (left axis) YoY change (right axis)
0.7
1.2
1.3
1.6
0
1
2
3
Spain Euro area
Quarterly GDP (INE and AIReF)
In Q3 2018, Spain's GDP grew by 2.4% year-
on-year (-0.1pp than in Q2 2018), with a
contribution of 2.8 points by domestic
demand and, for the fifth consecutive
quarter, a negative contribution by the
external sector, of 0.4 points.
In Q4 2018, AIReF maintains its quarterly
growth forecast at 0.7%, which means that
the year-on-year growth of the Spanish
economy is at 2.5% in 2018 (0.5pp below
that of 2017).
For 2019, in the wake of the downward
revision of growth expectations by the main
national and international organisations,
the Government is expected to present a
new macroeconomic scenario with a growth
rate of 2.2% compared with the previous
2.3%.
Labour market
In December, the number of unemployed
people registered in the Social Security fell
by 50,570 people compared with November,
reaching a total of 3,202,297. In total, 2018
closes with 210,484 fewer unemployed
people, representing an annual reduction of
6.17% (vs 7.8 in 2017).
The average number of affiliations to the
Social Security shows its best data since
2007 after advancing 3.06% year-on-year to
a total of 19,024,165 employed, 2.67 million
more than since the phase of economic
expansion commenced in 2014. Thus, the
affiliates-to-pensioners ratio increased
slightly with respect to 2017, standing at
2.28%.
CPI (INE)
In December, the leading indicator of the
harmonised index of consumer prices
(HICP) in Spain decreased, for the second
consecutive month, to 1.2%, mainly due to
the fall in fuel prices.
Since November, inflation in Spain has
remained below that of the Euro area, with
a difference of 0.4pp.
Economy…
at a glance January 2019
Unemployment
Thousands of people
Affiliations to the Social Security
Thousands of people
Economic forecast
%
Source: Círculo de Empresarios based on INE, AIReF & World Bank, 2019
HICP evolution, Spain and Euro area
% YoY change

2. ‘Economy at a glance’, a publication of the Círculo de Empresarios produced by its Department of the Economy, contains information and opinion from reliable sources. However,
the Círculo de Empresarios does not guarantee its accuracy and does not take responsibility for any errors or omissions. This document is merely informative. As a result, the Círculo
de Empresarios is not responsible for any uses that may be made of the publication. The opinions and estimates of the Department can be modified without prior warning.
www.circulodeempresarios.org
July August September October November December
Economic
sentiment
112.1 111.6 110.9 109.7 109.5 107.3
Industry 5.8 5.6 4.7 3 3.4 1.1
Services 15.3 14.4 14.7 13.3 13.4 12
Consumer -0.5 -1.9 -2.9 -2.7 -3.9 -6.2
Retail trade 0.3 1.9 2.4 -0.8 -0.5 0
Construction 5.4 6.4 8.3 7.9 8.2 7.2
-2
-1
0
1
2
49.4
54.1
45
50
55
60
65
Apr-14
Aug-14
Dec-14
Apr-15
Aug-15
Dec-15
Apr-16
Aug-16
Dec-16
Apr-17
Aug-17
Dec-17
Apr-18
Aug-18
Dec-18
China US
Economic
contraction
Economic
expansion
-30000
-20000
-10000
0
-8
-6
-4
-2
0
Primary income (right axis) Secondary income (right axis)
Trade balance of goods and services (right axis) Current account in % of GDP (left axis)
United Kingdom
In Q3 2018, the current account deficit
increased 64% year-on-year to £26.52bn
(5% of GDP), its worst record since Q3 2016.
By components, the largest setbacks
occurred in the primary income (108%) and
in the trade balance of goods and services
(63%).
Manufacturing PMI
In December, despite the slight rise in
production, China's Manufacturing PMI (a
leading indicator of GDP evolution) stood at
49.7 points, hinting to an economic
contraction.
In the case of the US, this indicator of
business sentiment fell by 5.2 points, to 54.1,
in comparison with November.
The evolution of this indicator in these two
superpowers (The US & China) coincides
with that of the five major European
economies.
In this context, the World Bank has lowered
its growth forecasts to 2.9% in 2019,
compared to its previous estimate of 3%.
Recession in Germany
In November, the industrial activity in
Germany continued its third consecutive
month of contraction (1.9% per month),
mainly due to the weakening of the energy
sector.
Additionally, in Q3 2018, the German GDP
shrank by 0.2% quarterly. Should this trend
continue in Q4 the German economy would
enter into technical recession1
.
Economic sentiment for the Euro area
In December, the Economic Sentiment
Index of the European Commission, which
analyses the confidence of households and
companies, suffered a greater decline than
expected as it stood at its lowest level since
2016. The worsening private-sector
expectations are mainly explained by the
possibility of a looming recession in
Germany, the global trade tensions, and the
risks associated with a no-deal Brexit.
Signs of global economic slowdown
Source: Círculo de Empresarios based on Office for National Statistics, 2019
Source: Círculo de Empresarios based on CaixaBank Research, National Bureau of
Statistics of China & ISM, 2019
Manufacturing PMI
Points
Current account balance
% of GDP, millions of £
Economic Sentiment Index in the Euro area
(European Commission)
Source: Círculo de Empresarios based on European Commission, 2019
Industrial activity in Germany
Monthly percentage change
Source: Círculo de Empresarios based on Financial Times & FactSet, 2019
1When you have an economic contraction for two consecutive quarters