The world is facing a context of high geopolitical and economic uncertainty that may lead to a foreseeable simultaneous contraction in the main areas. The post pandemic economic recovery has been disrupted by the direct consequences of the Russian invasion of Ukraine and its collateral effects on energy prices and supplies. The persistence of some risks and the materialization of other latent risks would turn the slowdown into a recession. Of particular note are the high inflation rates caused by the increase in the price of energy and food raw materials, and their transmission to the rest of the consumption basket, as well as by the continuous tensions in the supply chains. Also, if the systematic interruption of Russian natural gas supplies to Europe becomes effective, the impact on European economies will be significant and could trigger a global energy crisis. Finally, it cannot be ruled out that a disruption of grain exports from Ukraine and Russia could lead to a food crisis. In this environment of generalized inflation, major central banks have begun to normalize their policies, reducing sovereign debt purchases and raising interest rates. This monetary tightening will have a negative impact on the recovery, but it is necessary, especially where inflation expectations are beginning to unanchor . Without action, there may be second round effects with upward spirals requiring further monetary tightening, further damaging growth and employment. The main international organizations have revised their global growth forecasts downwards. Thus, in June, the OECD lowered its forecasts for 2022 to 3 % year on year (vs. 4.5 % estimated in December 2021 ), and in July, the IMF updated its April forecasts, reducing growth for 2022 by 4 tenths of a percentage point to 3.2

1. Economy
in check due to
global risks
S E P T E M B E R
2 0 2 2

2. ECONOMY
Global

3. ECONOMY IN CHECK DUE TO GLOBAL RISKS
The world is facing a context of high geopolitical and economic uncertainty that may lead to a foreseeable
simultaneous contraction in the main areas. The post-pandemic economic recovery has been disrupted by the direct
consequences of the Russian invasion of Ukraine and its collateral effects on energy prices and supplies. The
persistence of some risks and the materialization of other latent risks would turn the slowdown into a recession. Of
particular note are the high inflation rates caused by the increase in the price of energy and food raw materials, and
their transmission to the rest of the consumption basket, as well as by the continuous tensions in the supply chains.
Also, if the systematic interruption of Russian natural gas supplies to Europe becomes effective, the impact on
European economies will be significant and could trigger a global energy crisis. Finally, it cannot be ruled out that a
disruption of grain exports from Ukraine and Russia could lead to a food crisis.
In this environment of generalized inflation, major central banks have begun to normalize their policies, reducing
sovereign debt purchases and raising interest rates. This monetary tightening will have a negative impact on the
recovery, but it is necessary, especially where inflation expectations are beginning to unanchor. Without action, there
may be second-round effects with upward spirals requiring further monetary tightening, further damaging growth and
employment.
The main international organizations have revised their global growth forecasts downwards. Thus, in June, the OECD
lowered its forecasts for 2022 to 3% year-on-year (vs. 4.5% estimated in December 2021), and in July, the IMF updated
its April forecasts, reducing growth for 2022 by 4 tenths of a percentage point to 3.2%.
3.2%
world GDP growth in 2022 forecast by
the IMF in July 2022
3
2.9%
world GDP growth in 2023
Summary
Global economic situation

4. ECONOMY IN CHECK DUE TO GLOBAL RISKS
1
2
3
4
Evolution of the pandemic, stagnation in the administration of vaccines and
uncertainty about their efficacy in the face of the appearance of new variants
Persistent bottlenecks in global supply chains aggravated by the impact of the conflict
over relevant raw materials and in China by the shutdowns due to its "Covid 0" policy
and partial drought-related stoppages
Persistent high inflation. Erosion of gross disposable income, savings and impact on
household consumption and investment decisions. Concerns about 2nd round effects,
de-anchoring of expectations and inflationary spirals
Normalization and tightening of monetary policies to control inflation and
withdrawal of fiscal stimuli. In Europe, new instruments to mitigate the risk of
financial fragmentation
GROWTH
DETERMINANTS OF
THE WORLD
ECONOMY
Major risks to the global economy
5
Energy shortages, largely due to the eventual new supply shock that would result
from the cut-off of Russian gas supplies to Europe, and food shortages, especially in
emerging countries
4
Prolonged duration of the Russian invasion of Ukraine, effects of the impact of
sanctions applied to Russia and the eventual extension of the conflict to new
territories.
6

5. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Downgrading forecasts and economic slowdown
Source: Círculo de Empresarios based on IMF, OECD and BBVA Research, 2022.
Slowdown in the world economy,
with some quarters of negative growth
in the US and Europe
(BBVA Research)
5
OECD Forecast (June 22)
Global economy
2022 → 3%
2023 → 2.75%
6,1
3,2
2,9
2021
2022
2023
World
5,2
2,5
1,4
2021
2022
2023
Advanced
6,8
3,6
3,9
2021
2022
2023
Emerging
and
developing
countries
5.7
2.3 1.0
2021 2022 2023
US
5.4
2.6
1.2
2021 2022 2023
Eurozone
5.8 4.8
3.5
2021 2022 2023
Middle East and
Central Asia
7.3
4.6 5.0
2021 2022 2023
Emerging and
developing Asia
6.9
3.0 2.0
2021 2022 2023
Latin America and
Caribbean
4.6 3.8 4.0
2021 2022 2023
Sub-Saharan Africa
IMF Forecast

6. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Source: Círculo de Empresarios based on OECD, 2022.
% y-o-y change
Negative impact of the war on prices
OECD updates upwards its inflation forecast for the year 2022
6
Inflation rates continue to rise as food and energy prices increase and supply chain tensions persist
Dec. 21 initial forecast Forecast updated on Jun.22

7. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Source: Círculo de Empresarios based on OECD, Eurostat and BIS, 2022.
% y-o-y change
Inflation in the OECD and the Eurozone (Jul.-Aug. 22)
% y-o-y change
OECD rates are the highest in the past 40 years
7
-1
0
1
2
3
4
5
6
7
8
9
10
11
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Jul-22
UK
US
Eurozone
OECD
Aug. 22 – Eurozone inflation→ New all-time high
9.1%
In response, the major central banks raise their
benchmark interest rates
%
1.75
2.5
1.25
0
0,5
1
1,5
2
2,5
3
Feb-20
Apr-20
Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
UK US Eurozone

8. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Increases in raw material prices
Food commodity prices remain at record highs
Post-pandemic supply constraints and war in Ukraine put pressure on commodity prices
FAO monthly food price index
Source: Círculo de Empresarios based on FAO, 2022. 8
Drought in northern hemisphere countries has led FAO to downgrade
the world cereal production forecast for 2022
64.1
79.9
132.1 137.6
159.7
140.9
40
60
80
100
120
140
160
Jan-90
Jul-91
Jan-93
Jul-94
Jan-96
Jul-97
Jan-99
Jul-00
Jan-02
Jul-03
Jan-05
Jul-06
Jan-08
Jul-09
Jan-11
Jul-12
Jan-14
Jul-15
Jan-17
Jul-18
Jan-20
Jul-21
60
85
110
135
160
185
210
235
260
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Meat Dairy
Cereals Oils
Sugar
Oils and cereals lead increases
2400
2500
2600
2700
2800
2900
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
Production Use
Most of the expected decline relates to corn production in the EU due to the exceptionally hot
and dry weather conditions since late spring
Global cereal production and use figures
Millions of tons
600
700
800
900
2013/14
2014/15
2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
2021/22
2022/23
Global cereal stocks figures
Millions of tons

9. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Oil and gas price developments
€/MWh and $/barrel of crude oil
Threat of energy crisis in Europe
Energy prices, mainly gas, continue to rise. If the warning of a systematic cut-off of Russian gas supplies to Europe comes true, there is a latent risk of economic
recession in some of the main European economies
Source: Círculo de Empresarios based on Bloomberg and Investing 2022. 9
50
60
70
80
90
100
110
120
130
0
50
100
150
200
250
300
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Dutch TTF gas Brent crude oil (right axis)
Main energy risks in Europe
Rising gas and electricity prices, which are linked, would exacerbate the
impact on the cost of living
X
Social and political unrest if consumers find it difficult to heat their
homes and buy basic commodities
X
Cold snaps in Asia and Europe would intensify global competition
for limited liquefied natural gas (LNG) cargoes
X
Persistent drought could make it difficult to deliver coal to power
plants being reactivated to reduce gas use
X
OPEC price increases
X

10. ECONOMY IN CHECK DUE TO GLOBAL RISKS
132.6
134.0
131.8
131.3
134.9 134.9
154
164
174
184
118
120
122
124
126
128
130
132
134
136
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
World exports Eurozone exports
US exports China exports (eje dch.)
Tensions in supply chains moderate slightly
Source: Círculo de Empresarios based on New York Federal Reserve and CPB Netherlands Bureau for Economic Policy Analysis, 2022.
Gradually removing the anomaly of congestion in global supply
chains and lowering shipping costs
Global supply chain pressure index.
Value = 0 is at its mean. Values +/- indicate deviation +/- from the mean
World trade recovers dynamism after deterioration due to the
Russian invasion of Ukraine and the beginning of the war conflict
Index 2010 = 100
10
3.19
4.32
2.78
3.39
1.84
-1
0
1
2
3
4
5
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Restrictions COVID-19
War in
Ukraine

11. ECONOMY IN CHECK DUE TO GLOBAL RISKS
China: economic slowdown
Source: Círculo de Empresarios based on NBSC and Statista, 2022.
In Q2 22, China's GDP fell by 2.6% due to the cessation of activity linked
to the zero Covid policy and real estate problems.In year-on-year terms,
growth continues to decelerate
%
11
11.7
0.6
1.5 1.4
-2.6
18.3
7.9
4.8
0.4
-5
0
5
10
15
20
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
% quarterly change % y-o-y change
47.4
49.4
36.2
54
35
40
45
50
55
60
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Manufacturing Services
ManufacturingPMI remains in contractionary zone in Aug. 22, while services
PMI recovers after slump due to Ukraine war
Points (< 50: economic activity contraction; > 50: economic expansion)
126.4
112.6
127
120.5
86.7
88.9
85
95
105
115
125
135
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20
Apr-20
Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Deteriorating Consumer Confidence due to growingglobal uncertainty
Points (<100: consumer pessimistic about their economic situation; >100: consumer optimistic)

12. ECONOMY IN CHECK DUE TO GLOBAL RISKS
China: moderate inflation, but upward trend
Source: Círculo de Empresarios based on National Bureau of Statistics of China and Statista, 2022.
% change
Highlights include year-on-year increases in medicine and food and
non-alcoholic beverages
% change
The annual inflation rate has been on an upward path since March 22,
recovering in July from the 2.7% recorded in July 20
12
2.7
1.0 0.9
2.7
-2
-1
0
1
2
3
4
5
6
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
% monthly change
% y-o-y change

13. ECONOMY IN CHECK DUE TO GLOBAL RISKS
The US: in technical recession but with job creation
In Q2 21, the US economy declined for the second consecutive
quarter amid persistent inflation, low unemployment, rising interest
rates and supply chain problems
Source: Círculo de Empresarios based on BEA and OECD, 2022.
% change. Annualized rates Index >100: increased confidence and potential growth of economic activity
< 100: possible decline in future business performance
Uncertainty and economic slowdown dampen confidence
13
101.78
101.54 101.68
99.84
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Business confidence (on production and sales evolution)
Consumer confidence (regarding their financial situation)
Index >100: increased confidence; < 100: decreased confidence
99.83
95.47
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
-5.1
-31.2
33.8
4.5
6.3 6.7
2.3
6.9
-1.6 -0.6
-40
-30
-20
-10
0
10
20
30
40
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
% quarterly change % y-o-y change

14. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Millions and % labour force
14.7
3.53.7
23.0
5.76.0
Apr-20
Jun-20
Aug-20
Oct-20
Dec-20
Feb-21
Apr-21
Jun-21
Aug-21
Oct-21
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Unemployment rate Unemployed
The US: the labor market endures the slowdown
Source: Círculo de Empresarios based on Bureau of Labor Statistics, 2022.
Millions
Job creation continues, exceeding pre-pandemic level by 0.15%
(Feb.20) and reaching 153.7 million workers
The unemployment rate of 3.7% is below those recorded in recessionary
periods since the Great Depression (between 5.2% and 24.9%)
14
152,50
130,51
152,74
130
135
140
145
150
155
Ene. Feb. Mar. Abr. May. Jun. Jul. Ago. Sep. Oct. Nov. Dic.
2020
2021
2022

15. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Europe: increasing level of uncertainty
Source: Círculo de Empresarios based on Eurostat, 2022.
Since the beginning of the invasion of Ukraine, the European macroeconomic environment has been subject to high levels of uncertainty in view of the socioeconomic
and geopolitical risks facing the region
ESI (Economic Sentiment Indicator), points (average = 100) Indicators of confidence by sector and consumer confidence in EU-27.
Difference between favorable-unfavorable responses (pp)
15
In Aug. 22, the economic confidence indicator for the EU-27 reached its lowest level in 19 months
96.4
116.2
113.3
96.5
85
90
95
100
105
110
115
120
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
11.4 12.3
0.4
6.3 5.1
-5,8
-6.5
-11.7
-26.0
-30
-25
-20
-15
-10
-5
0
5
10
15
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Industry Retail trade Consumers

16. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Deteriorating manufacturing PMIs in Europe
Manufacturing activity has suffered in the main European economies and in the US, with falls of around 10 points or more, as a result of the effects of the war in
Ukraine, the shortage of components, the increase in prices and the growing uncertainty affecting demand
Source: Círculo de Empresarios based on Markit and JP Morgan, 2022. 16
▼ 13.5
▼ 6.9
▼ 12.9
▼ 9.6
▼ 11.8
▼ 13
▼ 9.8
▼ 1.2
▼ 0.7

17. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Eurozone: record low unemployment
Source: Círculo de Empresarios based on Eurostat, 2022. 17
In July 22, the unemployment rate in the Eurozone reached an all-time low,
bringing the total number of unemployed to 10.98 million
Unemployment rate as % of labour force and number of unemployed in millions of people
6.6
10.98
6
8
10
12
14
16
18
20
May-98
Oct-00
Mar-03
Aug-05
Jan-08
Jun-10
Nov-12
Apr-15
Sep-17
Feb-20
Jul-22
Unemployment rate Unemployed
% labour force
Spain leads the unemployment rate with 12.6% of the labour
force, 9.7 points higher than Germany (2.9%)

18. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Germany ¿road to a recession?
GDP expected to fall in Q3 22 amid uncertainty after a timid 0.1%
quarter-over-quarter increase in 2Q22
% change
Slight declines in the Ifo business climate index and in business
expectations for the next 6 months
Source: Círculo de Empresarios based on Ifo Institute, 2022.
Points
18
The context of high inflation, fears of recession and occasional Russian gas supply disruptions that may become constant increase risks
-1.4
-9.5
9.0
0.6
-1.5
1.9
0.8
0.0
0.8
0.1
-12
-7
-2
3
8
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
% y-o-y change % quarterly change
75.6
101.3
88.5
72.0
102.9
80.3
70
75
80
85
90
95
100
105
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Business Climate
Business Expectations

19. ECONOMY IN CHECK DUE TO GLOBAL RISKS
In France, in Q2 22, GDP rebounded by 0.5% quarter-on-quarter, with
positive contributions from both domestic demand (+0.2 points vs.
-0.5 in Q1 22) and foreign demand (+0.3 points, after -0.1 in Q1 22)
French and Italian economies resilient in the fase of crisis
In Q2 22, Italy's GDP increased by 1.1% over the previous quarter
with domestic demand offsetting the foreign sector
Source: Círculo de Empresarios based on Insee, 2022.
% change
19
Quarter-on-quarter % change in GDP
-1
0
1
2
3
4
5
Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022
Change in inventories
Net exports
Consumption
Investment
0,0
1,0
3,4
0,5
-0,2
0,5
-1
0
1
2
3
4
5
1T 2021 2T 2021 3T 2021 4T 2021 1T 2022 2T 2022
Contribution to quarter-over-quarter growth in pp
-5.9
-12.7
16.1
-1.6
0.2
2.6
2.7
0.7 0.1
1.1
4.7
-20
-15
-10
-5
0
5
10
15
20
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
% quarterly change % y-o-y change

20. ECONOMY IN CHECK DUE TO GLOBAL RISKS
-0.4
-0.12
-0.09
-1
0
1
2
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Services Industry Construction
Slowdown in activity in the United Kingdom
Source: Círculo de Empresarios based on Office for National Statistics, 2022. 20
The UK economy contracted by 0.1% in Q2 22 amid rising prices and
cost of living, deteriorating confidence and lower trade and investment
flows
% change
Monthly % change in GDP
All sectors contributed negatively to the monthly GDP growth in
Jun. 22
-2.5
-19.4
17.6
1.5
-1.2
5.6
0.9 1.3 0.8
-0.1
8.7
2.9
-22
-20
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
18
20
22
24
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
% quarterly change
% y-o-y change
0.8
-0.2
0.1
0.8
0.3
0.8
-0.2
0.6
0.0
0.1
-0.2
0.4
-0.6
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Contribution of sectors to monthly GDP growth in pp

21. ECONOMY
Spain

22. ECONOMY IN CHECK DUE TO GLOBAL RISKS
1
2
3
4
Efficient and transparent implementation of European funds associated
with the Recovery and Resilience Plan (RRP)
Fiscal consolidation, prioritizing efficiency and evaluation of
public spending, and sustainability of the Welfare State
Implementation of the necessary structural reforms in the right direction
to achieve a competitive, sustainable and inclusive economic model
SUSTAINED
AND SOLID
GROWTH AT
RISK
Challenges of the Spanish economy
National context marked by inflationary tensions, the effect of the change in monetary policy, the duration and impact of the Russian invasion of Ukraine, volatility in
financial markets, the persistence of disruptions in some global supply and distribution chains, the low level of execution of European Next Generation funds and the
consequences of new waves of the pandemic
Measures to control inflation and minimize its impact on businesses and
households without aggravating the public deficit
22
Adequate design of the energy policy
5

23. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Risks for the recovery of the Spanish economy
23
Persistent inflation and core inflation. Deterioration of competitiveness due to ▲ prices and second round effects on wages
X
Discretionary tax hikes without prior assessment of the efficiency of public spending
X
Economic impact of the war: deterioration of trade flows, disruption of energy supply, etc.
X
Bottlenecks and supply shortages resulting from disruptions in global value chains
X
Normalization of the ECB's monetary policy and increase in the cost of borrowing
X
Evolution of the pandemic and effectiveness of vaccines
X
Lack of transparency and delay in the execution of European funds
X
Uncertainty about legal certainty in the labor field
X
Labour supply shortage for jobs resulting from the green and digital transitions
X

24. ECONOMY IN CHECK DUE TO GLOBAL RISKS
4.3 (Government)
4.2 (FUNCAS Consensus)
4.0 (EC and IMF)
4.1 (BoS and OECD)
2.7 (Government)
2.8 (BoS)
2.5 (FUNCAS Consensus)
2.1 (EC)
2.0 (IMF)
2.2 (OECD)
Downward growth forecasts
% y-o-y change
Bank of Spain
(Jun.22)
*Forecasts
Source: Círculo de Empresarios based on Bank of Spain, M. Economic Affairs and Digital Transformation, FUNCAS, OECD, European Commission and IMF, 2022.
24
5.4
3.9
1.8
4.5
2.9
2.5
5.1
4.1
2.8
2.6
2021 2022* 2023* 2024*
Dec-21
Apr-22
Jun-22
Forecasts from national and international organizations
(Jun. and Jul. 22)
% y-o-y change
Government
2022* 2023*
7
3.5
4.3
2.7
2022 2023
PGE 22
Current

25. ECONOMY IN CHECK DUE TO GLOBAL RISKS
GDP growth in Q2 2022 remains unchanged
Strong private consumption sustains growth
Source: Círculo de Empresarios based on INE and Bank of Spain, 2022.
In Q2 22, GDP advanced 1.1% quarter-on-quarter on the back of the improvement in hotel and catering and foreign tourism and the recovery of the labour market. On a
year-on-year basis, the economy advanced 6.3% (domestic demand: +3.6 pp and foreign demand: +2.6 pp)
GDP in quarterly % change and other variables in contributions (pp) to GDP quarterly change
By sectors
Agriculture
▼ 2.9%
2.1%
▲ 3.0%
Industry
15.5%
Construction
5.0%
▲ 5.0%
Weight in % of total and % y-o-y change
25
▲ 7.7%
Services
66.9%
Economy grows despite uncertainty
Quarterly and y-o-y % change
-4.3
-21.5
-8.7 -8.8
-4.1
17.8
3.5
5.5 6.3 6.3
-22
-18
-14
-10
-6
-2
2
6
10
14
18
22
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
% y-o-y change % quarterly change
-5.4
-17.7
16.8
0.2 -0.5
1.1
2.6 2.2
0.2 1.1
-18
-15
-12
-9
-6
-3
0
3
6
9
12
15
18
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Private final consumption expenditure
Public final consumption expenditure
Gross capital formation
External demand
GDP

26. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Persistence of inflation at historically high levels
Source: Círculo de Empresarios based on INE, Bank of Spain and Eurostat, 2022.
In Aug. 22, the advance CPI annual rate was 4 tenths of a point
lower than in Jul. 22 to 10.4%. Core inflation continued to climb and
stood at 6.4%
% y-o-y change
In July 22, inflation stood at 10.8%. The rise is explained by the
increase in energy and raw material prices
Influence of the groups on the annual CPI rate in July 22
* Forecasts
26
CPI Forecasts
Bank of Spain
-0.3
7.2
2.6 1.8
2021 2022* 2023* 2024*
6.1 6.4
10.8
10.4
8.9 9.1
0
2
4
6
8
10
12
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Spain core CPI
Spain CPI
Eurozone HCPI

27. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Expectations damaged by uncertainty and rising prices
In Aug. 22, the manufacturing PMI remained in
contractionary territory and the services PMI fell 3.2 pp
Source: Círculo de Empresarios based on Markit, INE and CIS, 2022.
Consumer Confidence Index continues downward trend
> 50: expansion of activity
< 100: negative consumer perception
Harmonized Business Confidence Index rises 7.5% in Q3 22
compared to Q2 22 despite uncertainty
% quarterly change
27
55.7
97.5
91.6
98.3
81.3
89.8
53.8
76.0
55.5
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Transportation and hospitality ▲12.9%
By sectors, Q3 22
Trade ▲7.4%
Industry ▲7.3%
Other services ▲6.1%
Construction ▲6.0%
60,4
49,9
62,5
50,6
40
45
50
55
60
65
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Manufacturing PMI
Services PMI
3.6
5
12.3
1.1
-2.5 -2
7.5
Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022

28. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Loss of dynamism in the labour market
Source: Círculo de Empresarios based on INE and Bank of Spain, 2022.
LFS Q2 22 (INE)
Unemployment rate falls to 12.48% and employment slows down from
5.7% year-on-year in Q2 21 to 4%
Y-o-y change and unemployment rate as a % of labour force 9,9%
10,7%
10%
12,2%
8,8%
10% 10,9%
10,2%
12,3%
14,6%
16,1%
15,3%
22,5%
17,9%
Enrollment and registered unemployment Aug.22 (Social Security)
Slowdown in job creation and increase in unemployment
LFS Q2 22
20.5 M employed (+2.5% r/ Q4 19)
2.9 M unemployed (-8.5% r/ Q4 19)
Absolute monthly average change in Social Security affiliates month of August in
seasonally adjusted terms
100 100.3
100.8
100.5
100
96.4
99.5
99.8
95
97
99
101
Q4 2019 Q4 2021 Q1 2022 Q2 2022
Full-time equivalent job position Hours worked
Q4 19 = 100
Despite the increase in full-time equivalent employment, hours worked are still below pre-
pandemic levels
28
-50000
0
50000
100000
150000
200000
250000
300000
Aug-11
Aug-12
Aug-13
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
Aug-20
Aug-21
Aug-22
-100000
-80000
-60000
-40000
-20000
0
20000
40000
60000
80000
Aug-11
Aug-12
Aug-13
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
Aug-20
Aug-21
Aug-22
Absolute monthly change in number of unemployed August in seasonally
adjusted terms
12,48
12
13
14
15
16
17
-18
-13
-8
-3
2
7
12
17
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
Q1
2022
Q2
2022
Unemployment rate (right axis) Labour force
Employed Unemployed

29. ECONOMY IN CHECK DUE TO GLOBAL RISKS
The reduction of temporary employment as a result of labour reform
Source: Círculo de Empresarios based on M. Inclusion, Social Security, Migration and INE, 2022.
Since the entry into force of the labor reform (30 Mar. 22), the number of
workers with permanent contracts in the general regime has increased by
18.1% and the number of temporary workers has fallen by 24.3%
74.8
18.6
6.6
78.7
17.4
3.9
Full time Part time Fixed discontinued
Aug-22 Dec-21
Between Dec.21-Aug.22, the number of workers with fixed-term
contracts doubled and their share of permanent workers
increased to 6.6%
29
Average number of affiliates in general reg. in units and seasonality rate as % of total affiliates
36,1
33,3
26,5
9,782,808.6
10,230,468.1
11,553,660.1
5,514,785.8
5,118,443
4,173,478.6
20
25
30
35
40
45
4000000
5000000
6000000
7000000
8000000
9000000
10000000
11000000
12000000
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Temporary rate (right axis)
With indefinite-term contracts
Temporary contracts
Publication in the
BOE labour reform
Entry into force of
labour reform
From Mar. 22
Permanent affiliates ▲ 1.3 M
Permanent contracts ▲ 3.4 M
% of total members with permanent contracts
Dec. 21 Aug. 22
Full time
Part time
Fixed discontinued
7,703,325.8
1,697,497.3
381,985.5
8,639,537.9
2,151,125.8
762,996.4
N. affiliates with indefinite-term contracts

30. ECONOMY IN CHECK DUE TO GLOBAL RISKS
0
2
4
6
8
10
12
1100
1150
1200
1250
1300
1350
1400
1450
1500
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Debt
% y-o-y change (right axis)
-41,453
-19,639
-45000
-40000
-35000
-30000
-25000
-20000
-15000
-10000
-5000
0
2021 2022
Soc. Sec.
Autonomous Regions
Central Adm. (State and autonomous agencies)
Total
Persistent imbalances in public accounts
Public debt
Jun. 22
Consolidated general government deficit *
* In National Accounts terms. Without Local Corporations
Source: Círculo de Empresarios based on IGAE and Bank of Spain, 2022.
Billion €
Millions €
95.5% GDP
Dec. 2019
125.2% GDP
Mar. 2021
30
In Jun. 22, the State deficit amounted
to € 23.487 billion (-1.8% of GDP),
41.3% less than in Jun. 21 by the
increase in non-financial income
(main tax revenues)
116.8% GDP
Jun. 2022
€1,475 bn
-1.5% GDP
May. 22
-3.44% GDP
-1.5% GDP
** OOAA: Autonomous Agencies; LLCC: Local Corporations
Debt by subsectors
State AARR Soc. Sec AAEE** LLCC**
bn € 1295 317 99 47 23
% GDP 102 25 8 4 2

31. ECONOMY IN CHECK DUE TO GLOBAL RISKS
+40.7% y-o-y
Exports
+24.8% y-o-y
Jan.-Jun. 22
Top 3 exports by sector
Maximum values in foreign trade of goods
Source: Círculo de Empresarios based on M. Industry, Trade and Tourism, 2022.
€190.9 bn
Imports
Balance
€ -31.96 bn
€222.9 bn
Energy € -25.9 bn
In Jan.-Jun. 22 trade deficit was 7 times that of Jan.-Jun. 21
Non-energy € -6.1 bn
Food, beverages
and tobacco
▲13.4%
17.1%
Capital
goods
▲10.7%
17.0%
Chemicals
▲ 41.9%
18.5%
Asia
Millions €; Jan.-Jun. of each year Weight in % of total and % y-o-y change
X 2.6 y-o-y
vs. € +4.7 bn
Jan.-Jun.22
26.1 % 25.4 %
Exports by destination
62.4%
EU-27
54.8%
Eurozone
10.3%
America
% y-o-y change
32.3 %
% total
8.1%
8.2 %
31
100000
120000
140000
160000
180000
200000
220000
240000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Exports Imports

32. ECONOMY IN CHECK DUE TO GLOBAL RISKS
times r/ Jan.-Jul. 21
International tourist arrivals
x 3.4
Jan.- Jul. 22
Tourism recovery, close to pre-pandemic levels
Source: Círculo de Empresarios based on INE, 2022.
39,274,090 tourists
Tourist spending
Jan.- Jul. 22
€47.64 bn
1,213 € per tourist
7.9%
y-o-y
Through Jul. 22 cumulative
tourist arrivals was still
18.2% below the level of
the same period in 2019
x 4.3
times r/ Jan.-Jul. 21
32
Million tourists Million €
Top 3 emitting country
United Kingdom ------ €9.5 bn
Germany ------ €6.4 bn
France ------ €4.1 bn
0
10
20
30
40
50
60
70
80
90
Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.
2019 2020 2021 2022
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.
2019 2020 2021 2022

33. ECONOMY IN CHECK DUE TO GLOBAL RISKS
MARKETS

34. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Exchange rates - €/$ parity
Euro falls below parity with the dollar and to the lowest levels since late 2002
Source: Círculo de Empresarios based on Investing, 2022.
Daily exchange rate €/$
34
0.9941
1.2294
1.0694
1.251
1.0387
1.3934
1.206
1.4827
1.1915
1.514
1.2467
1.5988
1.1672
1.3558
0.8303
1.1563
0,8
0,9
1
1,1
1,2
1,3
1,4
1,5
1,6
25.08.2022
16.12.2021
08.04.2021
30.07.2020
21.11.2019
14.03.2019
05.07.2018
26.10.2017
16.02.2017
09.06.2016
01.10.2015
22.01.2015
15.05.2014
05.09.2013
27.12.2012
19.04.2012
11.08.2011
02.12.2010
25.03.2010
16.07.2009
06.11.2008
28.02.2008
21.06.2007
12.10.2006
02.02.2006
26.05.2005
16.09.2004
08.01.2004
01.05.2003
22.08.2002
13.12.2001
05.04.2001
27.07.2000
18.11.1999
11.03.1999
Uneven pace of interest rate
hikes by Fed and ECB to
curb rising inflation
Concerns about gas
supplies in Europe as Russia
threatens to cut off supplies
Outlook pointing to an
increasing risk of recession
in the Eurozone against a
backdrop of high inflation

35. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Spanish and Italian risk premiums increase in the current
scenario of uncertainty
Source: Círculo de Empresarios based on Investing, 2022.
Long-term sovereign debt yields and risk premiums continue to increase
Widespread increases in 10-year bond yields
%
35
Fixed income: rate hikes continue
66.8
111.7
95.8
181.0
117.6
231.3
Spain Italy
Average 2021 Average Jan.-Jul.22 Aug-22
+76%
+107.1%
0.4 0.4
2.7
-0.5
-0.3
1.5
0.8
1.5
3.3
0.3
0.8
3.0
-1,0
0,0
1,0
2,0
3,0
Average
2020
Average
2021
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Spain Germany
US UK
Basic points

36. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Stock markets unstable due to international uncertainty
The MSCI World Stock Index (MSCI World) is 15.7% below the
peak reached at the end of 2021
Source: Círculo de Empresarios based on Investing, 2022.
The main stock market indexes are suffering from the consequences of the war in Ukraine and the context of high generalized inflation
Market volatility
Jan. 2020 = 100
Price US$
36
1500
1700
1900
2100
2300
2500
2700
2900
3100
3300
01.01.2020
12.02.2020
25.03.2020
06.05.2020
17.06.2020
29.07.2020
09.09.2020
21.10.2020
02.12.2020
13.01.2021
24.02.2021
07.04.2021
19.05.2021
30.06.2021
11.08.2021
22.09.2021
03.11.2021
15.12.2021
26.01.2022
09.03.2022
20.04.2022
01.06.2022
13.07.2022
24.08.2022
70
80
90
100
110
120
130
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
IBEX-35 S&P 500 Euro Stoxx 50 Emerging MSCI

37. ECONOMY IN CHECK DUE TO GLOBAL RISKS
Thank you