The document reports on recent economic indicators from Spain, the Eurozone, Italy, Germany, and China. In Spain, the economic sentiment index fell significantly in August due to worsening data in key sectors. International tourism to Spain plunged in July, with visitor numbers down 75% year-over-year. Inflation in Spain eased slightly in August. In Italy, GDP contracted by a record 12.8% in Q2 2020 due to declines in all components of demand. Germany is forecast to experience a smaller economic contraction in 2020 than previously expected, while Chinese economic activity continued recovering in August as shown by increases in manufacturing and non-manufacturing PMIs.

1. Source: Círculo de Empresarios based on INE, 2020.
60
70
80
90
100
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Spain
Eurozone
0
20
40
60
0
20
40
60
2016 2017 2018 2019 2020
Tourists Tourist expenditure (right axis)
-0.2
-0.6
-1
0
1
2
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Eurozone
Spain
Economic sentiment, Spain
In August, the Economic Sentiment Indicator
(ESI) in Spain registered a fall of 2.5 points
compared to July, reaching 88.1 points. This
places Spain as the EU country where
confidence levels have fallen the most.
The reason for this was the worsening of the
data for construction (-5.9 points compared
to July), retail trade (-5.2 points), the service
sector (-4.6) and consumers (-3.1). On the
other hand, industry improved relatively well
(+0.9) with respect to July.
For its part, the ESI for the Eurozone
registered an increase of 5.3 points to 87.7, due
to an improvement in the service sector (+9
points compared to July), retail (+4.6 points)
and industry (+3.5).
Tourist sector, Spain
In July, the number of international tourists
visiting Spain fell 75% year-on-year, with 2.5
million visits.
By country of residence, visits from France
(24.2% of the total number of tourists),
registered a fall of 58.4% year-on-year, followed
by Germany (17.5% of the total) with a fall of
65.2% year-on-year, and the United Kingdom
(15.3%), with a -82.5% decrease year-on-year.
Between January and July, 13.2 million tourists
arrived in Spain, a figure which represents a
decrease of 72.4% with respect to the same
period in 2019 (34.8 million fewer tourists).
For its part, in July spending by international
tourists fell 79.5% year-on-year to €2.45
billion.
At the same time, the average spending per
tourist was €944, which represents a decrease
of 17.8% year-on-year. In terms of spending by
country, Germany (18.7% of the total), France
(15.3%)andtheUK(15.2%)allplummetedyear-
on-yearby67.5%,65.2%and84.7%respectively.
Between January and July, spending fell 72.6%
year-on-year, reaching €14.3 billion (compared
to +3% from January-July in 2019).
HICP, Spain
In August, the HICP (Harmonised Index of
Consumer Prices) advanced indicator showed
an easing of the decrease to 0.6% year-on-year
(against -0.7% in July) due to the increase in
electricityprices.Ifconfirmed,thisfigurewould
represent a variation of 1 pp from the August
2019 rate and would be the worst registered
figure for this month since 2009 (-0.7% year-on-
year).
For its part, the HICP for the Eurozone is
expectedtofall0.2%year-on-year(comparedto
+1% in August 2019) due to an increase in the
prices of food, alcohol and tobacco and services.
Economy…
at a glance September 2020
Source: Círculo de Empresarios based on European Commission, 2020.
HICP, Spain and Eurozone
YoY change (%)
Tourists and tourist expenditure January-July, Spain
Millions of people and €bn
Source: Círculo de Empresarios based on INE, 2020.
Economic Sentiment Index, Spain and Eurozone
Points

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
-20
-15
-10
-5
0
5
Q2
2005
Q4
2006
Q2
2008
Q4
2009
Q2
2011
Q4
2012
Q2
2014
Q4
2015
Q2
2017
Q4
2018
Q2
2020
QoQ change YoY change
Previous
forecast
Current
forecast
2020 2021
-5.8 4.4
-6.6 5.2
25
35
45
55
Feb-18
Apr-18
Jun-18
Aug-18
Oct-18
Dec-18
Feb-19
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20
Apr-20
Jun-20
Aug-20
Manufacturing PMI
Non-manufacturing PMI
GDP, Italy
In Q2 2020, according to the definitive data
published by the Italian National Institute of
Statistics (Istat), Italy’s GDP contracted
12.8% quarterly, 4 tenths more than initially
forecast. In year-on-year terms, the decrease
was 17.7%.
This result is the worst since reporting began,
and the Italian economy has already
accumulated its third consecutive quarter of
contraction.
By demand components, public spending
registered a fall of 0.9% quarterly, household
spending by 11.3% and gross fixed capital
formation 14.9%. At the same time, exports fell
26.4% in the quarter, and imports by 20.5%.
In comparison with the main economies in the
region, Italy shows the third biggest decline in
this quarter, after Spain (-18.5%) and France
(-13.8%).
German recovery
In 2020, according to the forecasts by the
government, German GDP will contract 5.8%,
somewhat less than the -6.6% forecast in
March, due to the sharp upturn in activity
after the collapse in Q2. For 2021, a growth of
4.4% is expected, compared to the
previous estimate of 5.2%.
The latest figures for August showing an
increase in employment and a rise in
confidence of German companies, support
this forecast improvement:
- Unemployment fell for the second
consecutive month to 2.95 million people,
retaining an unemployment level of 6.4%.
- The German IFO business climate index
exceeded expectations and rose to 92.6 from
the previous figure of 90.4.
- Manufacturing PMI rose 1.2 points
compared to July reaching 52.2 points – its
maximum level for the past 22 months.
Economic activity, China
In August, Chinese economic activity
continued to recover, boosted by public
investment and the reopening of
international economies, which helped to
reactivate demand and the export sector.
Non-manufacturing PMI rose to 55.2 points
(against 54.2 points in July), its highest level
since the start of 2018 when the economy
grew above 6% yearly.
Manufacturing PMI slowed down slightly to
51 points (against 51.4 points in July).
Industrial activity is showing slight signs of
recovery.
Although demand for manufactured
products is improving, and new export
orders are increasing, more than half the
companies still point to insufficient market
demand as one of the main problems they are
facing.
Evolution of GDP, Italy
(%)
Source: Círculo de Empresarios based on German Government, 2020.
German Government forecasts
(%)
Source: Círculo de Empresarios based on Istat, 2020.
Source: Círculo de Empresarios based on National Bureau of Statistics
of China, 2020.
PMIs evolution, China
Points