Economic Summery of Spain and international economy

1. February 2017
O
SPAIN
Employment January 2017 (Ministry of Em-
ployment and Social Security)
Registered unemployment rose by 57,257
persons from December to reach 3,760,231, one
of the lowest levels of the past seven years. In
year-on-year terms, the number of people
without work dropped by 390,524 (down
9.41%), the largest decline since 1999.
In December there were 1,633,592 new con-
tracts (up 16.94% year-on-year), of which
150,162 were permanent (9.2%).
The average affiliation to Social Security was
17,674,175 persons, 174.880 fewer than the pre-
vious month but 569,817 more (up 3,33%) than
in the same period of the previous year.
At present the ratio of affiliates to pensioners
is 2.26.
CPI January 2017 (INE)
For the fifth consecutive month inflation
reached 3% annually (vs. 1.6% in December),
the highest rate since July of 2013 (1.8%), prin-
cipally because of increases in the price of fuels
(+16% annually) and energy (electricity:
+26,2%).
The annual rate of underlying inflation in-
creased by one decimal point, to 1.1%.
Public deficit (European Commission) The European Commission has revised
upward its prediction for Spain’s public deficit
in 2017 to 3.5% of GDP (+2.2 billion euros),
four decimal points above the objective of
3.1%), which would suggest an additional
adjustments of 4.4 billion euros in the budget.
In 2018, the deficit is expected to -2.9% of
GDP.
Prediction for tax collection
For 2016, the Treasury Department predicts
that tax revenues will reach 187.98 billion
euros, some 5.54 billion less than what was
budgeted (193.52 billion). With respect to
2015, classified by the kind of tax, income will
increase 12.8% in the Corporation Tax, 3.6% in
the VAT, 3.1% in Excise Duties and 0.4% in the
Personal Income Tax.
In 2017, the year in which the authorities
expect to recover the GDP level of 2007, it is
estimated that there will be some total tax
income of 202.593 billion, some 0.9% more
than pre-crisis levels (200.676 billion).
2,29
2,71
2,25 2,27
Jan. 17
2,26
Dec.00 Dec.08 Dec.16
Rate affiliates / pensioners
Source:Ministryof Employment and Social Security,2017
-0,3
-0,8 -0,8
-1,1 -1
-0,8
-0,6
-0,1
0,2
0,7 0,7
1,6
3
0,9 1 1,1
0,7 0,7 0,6 0,7
0,9 0,8 0,8 0,8
1 1,1
-1,5
-1
-0,5
0
0,5
1
1,5
2
2,5
3
Annual CPI
%, Base 2016
Source:INE, 2017
General
CPI
Core
CPI
-4,6
-3,1
-2,2
-4,7
-3,5
-2,9
2016 2017 2018
Public deficit forecasts
% GDP Government Brussels
Source:Treasury Department,2017
72.614 72.662 78.104
44.823
23.290
25.099
55.851
62.494
68.280
19.786
19.750
20.525
7.602
9.784
10.585
0
20.000
40.000
60.000
80.000
100.000
120.000
140.000
160.000
180.000
200.000
2007 2016* 2017*
Tax revenues
Million €
Corporate tax
GVA
Special taxes
INDIRECTSDIRECTS
* Forecasts
** Other direct and indirect taxes
Source:Treasury Department,2017
Income tax
Other**
Así está…
The economy

2. ‘Así está…The economy’, 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 any warning.
www.circulodeempresarios.org
EUROPE
GDP growth in the 4Q of 2016 (Eurostat)
GDP in the Eurozone grew 0.4% on a quarterly
basis and 1.7% year-on-year (0.5% and 1.8%
respectively in the EU28), driven by the still
low energy prices, the depreciation of the euro
against the dollar, and lower interest rates.
Spain is among the countries that are growing
the most, with a quarter-on-quarter rate of
0.7% and an annual rate of 3%.
Winter predictions (European Commis-
sion)
The European Commission has revised
upwards its predictions for the Eurozone, and
is now forecasting annual GDP growth of 1.6%
in 2017 and of 1.8% in 2018. In Spain there is
expected to be an advance of 2.3% and 2.1%,
respectively.
Private consumption will continue to be the
main engine of growth, supported by
improvements in employment and a rise in
salaries, although the reduction in household
purchasing power due to higher inflation will
slow that growth.
Minimum salary (Eurostat)
With the exception of Denmark, Italy, Cyprus,
Austria, Finland and Sweden, the rest of the
EU28 countries have a minimum salary set by
law, divided into three categories depending
on the quantity.
Expressed by Purchasing Power Standard
(PPS), taking into account the price levels in
each country, the differences in amount
between them are notably reduced.
Germany. Overseas sector 2016
In 2016, German exports increased 1.2% year-
on-year, to 1.2 trillion euros (38.5% of GDP), to
reach a new record (Federal Office of
Statistics). The exports to the Eurozone grew
1.8% (to 441.8 billion euros), while those to the
rest of theEU countries did so by 2.8% (266.1
billion). By contrast, sales to non-EU countries
dropped 0.2% (499.6 billion).
Imports totalled 954.6 billion (+0.6% year-on-
year), surpassing the previous maximum, in
2015 (949.2 billion). The present trade surplus
is 252.9 billion (vs. 244.3 billion in 2015),
equivalent to 8.1% of the German GDP.
INTERNATIONAL
Japanese growth in the 4Q of 2016
The Japanese economy grew 1% year-on-year
(vs. 1.2% in 2015) and 0.2% quarter-on-quarter
(the fourth consecutive rise since September of
2013), driven by company investment (0.9%
quarter-on-quarter) and by exports (2.6%),
which improved because of greater demand
from China and the United States and because
of the weakness of the yen (since November it
has lost 8.5% of its values against the dollar.)
3,0
2,5
2,2
1,9 1,8 1,8 1,7
1,1 1,1
0,3 0,3
GDP
% annual change
Source:Eurostat,2017
2,3
1,8
1,6
2,1
1,8 1,8
0
0,5
1
1,5
2
2,5
3
3,5
Ireland
Poland
Sweden
Spain
Netherlands
EU
Eurozone
Germany
Portugal
UK
France
Finland
Italy
GDP forecasts
% annual change
2017 2018
Source:European Commission, 2017
826
Luxembourg
Ireland
Netherlands
Belgium
Germany
France
UK
Spain
Slovenia
Malta
Greece
Portugal
Estonia
Poland
Slovakia
Croatia
Hungary
Czech Rep.
Lithuania
Latvia
Romania
Bulgaria
Minimum wages in the EU
Monthly €, PPS
Source:Eurostat,2017
< 500 €
500 € -
1.000 €
> 1.000 €
WITHOUT MINIMUM WAGE
Denmark
Italy
Cyprus
Austria
Finland
Sweden
500 1.000 2.000