Global and-spanish economic perspectives Q3 2021 Quarterly Report December 2021

Quarterly
report
D E C E M B E R 2 0 2 1
GLOBAL AND SPANISH ECONOMIC PERSPECTIVES
Q3 2021

INDEX
• Global economy
• Asia
• North America
• South America
• Europe
GLOBAL
01.
• Summary, challenges, risks, forecasts and growth
• Labour market
• Public accounts and Social Security funds
• Prices evolution: CPI
• External sector: trade and tourism
• Business creation
• Real estate sector
SPAIN
02.
• Stock markets
• Bond markets
MARKETS
03.

GLOBAL AND SPANISH ECONOMIC PERSPECTIVES. Q3 2021
Summary
Global economic situation
The world economy’s recovery continues although its sustainability isn’t
assured in a context of pandemic outbreaks and uncertainty about its future
evolution, disruptions in supply chains and inflationary pressures on raw
materials and energy. The differing vaccination rates and the support
policies applied in each country to lessen the pandemic’s impact have
deepened divergences in growth, mainly between advanced economies and
low-income countries.
A positive performance is expected in all world regions in 2021, although
growth in sub-Saharan Africa and the Middle East will be lower than in the
rest of the regions. Inadequate access to vaccines and regional political
instability are two of the causes of this worse performance. 4.9%
In 2022, recovery will be consolidated
but at a slower pace in emerging and
developing economies
5.9%
World GDP growth forecast by the
IMF in 2021, after falling 3.1% last
year
4

Forecasts Uncertain and uneven global recovery
Forecasts from 2021.
Source: Círculo de Empresarios based on IMF, 2021.
5
-6.3
5 4.3
2020 2021 2022
Eurozone
-3.4
6 5.2
2020 2021 2022
US
-7
6.3
3
2020 2021 2022
Latin America and
Caribbean
-2.8
4.1 4.1
2020 2021 2022
Middle East and
Central Asia
-0.8
7.2 6.3
2020 2021 2022
Emerging and
developing Asia
-1.7
3.7 3.8
2020 2021 2022
Sub-Saharan
Africa
-3.1
-4.5
-2.1
5.9
5.2
6.4
4.9
4.5
5.1
World
Advanced
Emerging and
developing
2020 2021 2022

1
2
3
4
The pandemic’s resurgence, uneven distribution of vaccines and
uncertainty about their efficacy in the event of the possible
appearance of new variants
Disruptions in global supply chains following a rapid recovery in
demand
Inflationary pressures - Increase in energy and raw material prices.
Concern about second-round effects
Disparity in the economic support policies applied by national
authorities during the pandemic
6
5 Risk of bubbles
FACTORS
CONDITIONING THE
STRENGTH OF
GLOBAL ECONOMIC
RECOVERY
Risks holding back global recovery

Uneven recovery conditioned by vaccination
Access to vaccines largely explains the uneven recovery in late 2021
The advanced economies are the only ones that will
regain pre-pandemic growth levels in 2022
% deviation from pre-pandemic growth trend
7
% vaccines available vs. population
Divergences between countries are intensifying due to the different vaccination rates and the support policies applied in the pandemic.
<5%
Developing low-income
<40%
Emerging
>60%
Advanced
% of fully
vaccinated
population
0 10 20 30 40 50 60 70 80 100 120+
-2.3%
0.9%
-5.5%
-2.1%
-6.7%
World Advanced
economies
Emerging
markets
(excl. China)
China Low-income
developing
countries

1.4%
0.7%
2.8%
2.3%
5.1% 5.1%
5.5%
4.9%
0%
1%
2%
3%
4%
5%
6%
2019 2020 2021 2022
Economías avanzadas Economías emergentes y en desarrollo
Inflationary pressures globally
Main causes of the inflation:
The IMF forecasts inflation of 2.8% in advanced economies and 5.5% in
emerging and developing economies, levels that will moderate in 2022
1
2
3
Resurgence of pent-up demand supported by expansionary
fiscal and monetary policies.
Fast rise in raw material and energy prices.
Component shortages and supply chain disruptions.
% year-on-year
8
Risk of a persistent price hike
1
2
Inflation’s persistence may alter expectations and carry over
to wages, increasing the chances of an inflationary spiral.
For the moment, the ECB considers that inflation will be
transitory and doesn’t plan to change its monetary policy.
On the other hand, the Fed and BoE are considering cutting
back on their ultra-expansionary policies.
Advanced economies Emerging economies

Consumer confidence is above pre-pandemic levels after hitting
a low in Apr. 2020
Resurgence of pent-up demand
9
During the pandemic, in most advanced economies lockdowns
and restrictions greatly increased saving, which is driving demand
as it resurges
Excess accumulated savings* (% of accumulated savings)
Consumer Confidence Index, OECD 100 = long-term average
*Excess accumulated savings refers to household savings from Q1 2020-Q1 2021 or the last
available quarter, which exceeds expected savings based on a linear trend from Q1 2017-Q4
2019 for each country.
100.4
97.8
101.1
100.7
98
98
99
99
100
100
101
101
102
Apr-19
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
-3
10 11
20 23
33 36 37 42 44 45
54
66 66 67 67
77 79
113114
206213
226
Sweden
China
Hungary
Denmark
Germany
Austria
France
Netherlands
Finland
Czech
R.
Norway
South
Africa
Australia
Belgium
Italy
Portugal
US
Ireland
Spain
UK
Poland
Japan
Canada
Source: Círculo de Empresarios based on IMF and OECD, 2021.

Natural gas: high global demand
Europe is almost completely dependent. The main supplying
country is Russia
Significant increase in global demand, boosted by consumption in Asia
Gas consumption–TWh
10
Natural gas prices have increased by 111% since January 2021 due to the increase in worldwide demand.
North
America
Africa
South America
Middle East
Asia Pacific
CIS
Europe
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1965 1980 1990 2000 2010 2020
US
23%
Canada
4.3%
Russia
16.6%
China
5%
Algeria
2.1%
Saudi
Arabia
2.9%
Iran
6.5%
Indonesia
1.6%
Norway
2.9%
Qatar
4.5%
Imports mainly to
Spain and Italy
Source: Círculo de Empresarios based on Statista, Our World in Data and Bloomberg, 2021.

Disruptions in supply chains
Strong increase in demand for products containing microchips
due to pandemic-related changes (working-from-home, remote
learning, digitization)
Chip market evolution - Billions $
The global economic recovery has caused global supply chains to
suffer from a lack of operational capacity and a shortage of raw
materials
Supply Chain Disruption Index * (May 2016 = 100)
*Supply chain disruptions are calculated as the difference between the Purchasing Managers Index (PMI) supply lead times sub-index and a counterfactual cyclical measure of supply lead times
based on the PMI’s manufacturing output sub-index.
0
20
40
60
80
100
120
140
2020 2021 2022 2023 2024 2025
Chips avanzados
Chips no avanzados
0
100
200
300
400
500
600
700
800
900
-10
0
10
20
30
40
50
60
70
May-16
Aug-16
Nov-16
Feb-17
May-17
Aug-17
Nov-17
Feb-18
May-18
Aug-18
Nov-18
Feb-19
May-19
Aug-19
Nov-19
Feb-20
May-20
Aug-20
Nov-20
Feb-21
May-21
Aug-21
Eurozona
EEUU
China
Mercados emergentes
Shanghai index (eje dch.)
Eurozone
US
China
Emerging markets
Shangai Index
Advanced chips
Non-advanced chips
Source: Círculo de Empresarios based on IMF and CaixaBank, 2021. 11

Source: Círculo de Empresarios based on Markit and JP Morgan, 2021. 12
Manufacturing PMIs
After the sharp drop in PMIs globally in the first half of 2020 due to the standstill in activity during the pandemic’s worst months, manufacturing activity has
continued its recovery in 2021 following the increase in demand, the improvement in the health situation thanks to progress in vaccination, and fiscal and
monetary support from the authorities.

Source: Círculo de Empresarios based on IMF, 2021. 13
-4.6
2.3
-7.3
-3.4
2.4
8
9.5
2.9
3.2
5.6
8.5
5.8
Japón China India ASEAN
2020 2021 2022
India
9%
Japan
Asia: recovery
India and China are the two countries in the region that will grow
the most in 2021, followed by Vietnam and Taiwan.
India and China are leading growth in 2021

Source: Círculo de Empresarios based on NBS, 2021. 14
1.5% 1.5%
-9.8%
11.5%
2.7% 2.6%
0.6%
1.3%
0.2%
3T
2019
4T
2019
1T
2020
2T
2020
3T
2020
4T
2020
1T
2021
2T
2021
3T
2021
7.1
24.6
9
4.9
4.6
34
14.1
5.1
0
5
10
15
20
25
30
35
40
4T 2020 1T 2021 2T 2021 3T 2021
Producción industrial
Ventas al por menor
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Industrial production
Retail sales
Q4 2020 Q1 2021 Q2 2021 Q3 2021
China: economic slowdown
Industrial production’s significant dynamism compared to 2020 is
moderating as 2021 progresses
% variation over the same period in the previous year
Chinese growth maintained its moderation trend with a reached
0.2% in Q3
% quarterly variation

Source: Círculo de Empresarios based on NBS, 2021. 15
0.1%
-3.7%
1.7%
13.5%
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
0.7%
-0.3%
1.3%
0.7%
1.5%
-1%
0%
1%
2%
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
Mensual Internanual
Monthly Year-on-year
China: producer price increase*
% CPI variation
On the other hand, the evolution of producer prices has been on an
upward trend since February 2021
% PPI monthly variation
Chinese monthly and year-on-year inflation grew by 1.5% and 0.7%
respectively
*The Producer Price Index (PPI) is an indicator that measures the average change in sales prices for local producers of goods and services in China.

Source: Círculo de Empresarios based on BIS y NBS. 16
17.9
61.7
10
20
30
40
50
60
70
80
90
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Eurozona China India Brasil Economías avanzadas
0%
5%
10%
15%
20%
25%
30%
0
200.000
400.000
600.000
800.000
1.000.000
1.200.000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Valor total de la producción de la
construcción
PIB
% construcción sobre PIB (eje dch)
Eurozone Brazil Advanced economies 1,200,00
1,000,00
800,000
600,000
400,000
200,00
Total value of construction
GDP
% construction over GDP
China: debt and construction
Household debt increased from 18% of GDP in 2008 to over
60% in 2020
Construction has grown at a faster pace than GDP, its
contribution going from 10% in 1995 to 26% in 2020
Household leverage ratios by country % GDP
In China, a growing household debt rate coexists with an increase in the prices of flats in large cities and construction’s relative weight in GDP that’s close to 25%.
100 million yuan and % GDP (right axis)

North America: regional growth, unemployment and trade
Canada has the highest unemployment rate in the region (6.7%),
followed by the US (4.6%) and Mexico (4.2%).
Unemployment
Current account (% GDP)
Mexico was the only one of the three countries registering a current
account surplus (2.4%) in 2020, but in 2021 the balance will be 0%. In
2021, a negative balance is expected for the US (-3.5%), while Canada
will export more than it imports (0.5%).
In 2022 dynamism will continue although growth rates will
moderate to 4.9% in Canada, 5.2% in the US and 4% in Mexico.
Growth in the region of around 6% in 2021

Source: Círculo de Empresarios based on Federal Reserve Economic Data, 2021. 18
1.2%
1.9%
4.8%
5.3%
1.6%
1.4%
3.7%
4.1%
4T 2020 1T 2021 2T 2021 3T 2021
Inflación general
Inflación subyacente
-2.3%
0.5%
12.2%
4.9%
0.2%
1.2%
2% 1.8%
4T 2020 1T 2021 2T 2021 3T 2021
var. Interanual var. r/2019
Q4 2020 Q1 2021 Q2 2021 Q3 2021
Q4 2020 Q1 2021 Q2 2021 Q3 2021
The US: recovery and rising inflation
In Q3 2021, the US economy grew by 1.8% compared to
Q3 2019 and 4.9% year-on-year
Headline and core inflation are on the same upward
trend, driven mainly by higher energy prices and
bottlenecks in the distribution chain
Real GDP, % year-on-year change and compared to 2019
% year-on-year change
Y-o-y change % change compared to 2019
General Inflation
Core Inflation

10.4
6.5
5
6
7
8
9
10
11
12
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
Source: Círculo de Empresarios based on Bureau of Economic Analysis, 2021. 19
2,031
1,878
1,786 1,741
1,586
Comercio,
transporte y
servicios
públicos
Servicios
educativos y
sanitarios
Servicios
profesionales y
empresariales
Atención
sanitaria y social
Ocio y hostelería
+46.5%
Jan.-Sep. 21
The US: excess job vacancies after the pandemic
The number of job vacancies reached a new high in Sep. 2021, 10.4 million. Total job registrations and cancellations
hardly differed, standing at 6.5 million and 6.2 million respectively
Millions
Thousands
Job market vacancies increased 46.5% between Jan. and Sep. 2021 In Sep. 2021, almost 20% of vacancies were concentrated in the
trade, transport and public service sectors
Trade,
transportation
and utilities
Educational
and health
services
Professional
and business
services
Health and
social care
Leisure and
hospitality

Source: Círculo de Empresarios based on OECD, 2021. 20
-5.8
-4.9
-3.2 -3.6
-4.8
16.9
5.7
4T 2020 1T 2021 2T 2021 3T 2021
-1.5
-0.2
-1.6 -1.6
-3.3
12.1
4
4T 2020 1T 2021 2T 2021 3T 2021
-1.6%
r/ Q3 2019
-3.6%
r/ Q3 2019
Canada and Mexico: incomplete recovery
The Canadian and Mexican GDPs haven’t recovered their pre-pandemic levels despite their positive growth rates in Q2
and Q3 2021
Real GDP Canada Real GDP Mexico
Compared to Q3 2019
Y-o-y change
Y-o-y change
Compared to Q3 2019
Q4 2020 Q1 2021 Q2 2021 Q3 2021
Q4 2020 Q1 2021 Q2 2021 Q3 2021

Inflation in the region reached 8.1% in 2020 and 2021 is expected to
close with a price hike of 11.5%.
Argentina, with 42% and Venezuela with 2,355% inflation registered in
2020, are the countries with the worst prospects for price stability.
Inflation
Current account
In 2020, the region’s current account accounted for –0.9% of GDP. In
2021 and 2022 it will be -0.7% and -1.3%, respectively.
By country, Paraguay (3.5%) and Ecuador (1.7%) are the ones that will
register the best current account balance vs. GDP in 2021.
Among emerging regions, Latin America was most affected by the
pandemic, with GDP falling by 6.6% in 2020.
Uneven growth
South America recovery at different speeds

36.6
52.1
30
35
40
45
50
55
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
Source: Círculo de Empresarios based on The Economist and Argentina´s government, 2021. 22
Argentina: endemic problems
A large part of the Argentine deficit (4% GDP) is expected to be
financed with debt issuance.
Monetization of the deficit
Price controls
The Argentine government has set the price of 1,432 products.
Capital flight
In the “Pandora papers”, Argentina ranks third in terms of the number
of beneficiaries of offshore companies, after Russia and the United
Kingdom.
Argentina's headline inflation has been moving upward since
Sep. 2020, reaching 52.1% in Oct. 2021
CPI– % year-on-year change
Food and
non-alcoholic
beverages
51.4%
Health
60.9%
Clothes and
footwear
62.2%
Transport
59.8%

Source: Círculo de Empresarios based on Eurostat and European Commission, 2021. 23
-0,8
-0,6
-0,4
-0,2
0
0,2
0,4
0,6
0,8
2020 2021* 2022* 2023*
Private consumption Public consumption Investment
Exports Imports
*Forecasts
Belgium/Czech Rep.
Bulgaria
Denmark
Germany
Estonia
Ireland
Greece
Spain
France/EU-27
Croatia
Italy/Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Romania
Slovenia Slovakia
Finland
Sweden
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
3T 2020 4T 2020 1T 2021 2T 2021
EU-27 economies that in Q2
2021 had not recovered pre-
pandemic levels.
EU-27: recovery restrained by new outbreaks
Not all economies have recovered their pre-pandemic level and their evolution is conditioned by a possible new wave
appearing and new strains evading the immunity provided by current vaccines
Exports and private consumption will drive the recovery
In Q2 2021, 19 EU-27 economies had recovered their pre-pandemic GDP
level (Q4 2019). Germany reached it in Q3 2021
4Q 2019 = 100
Contribution to GDP variation
Q3 2020 Q4 2020 Q1 2021 Q2 2021

Source: Círculo de Empresarios based on European Commission, 2021. 24
Eurozone: European Commission forecasts
The Eurozone economy hasn’t yet recovered its pre-
pandemic GDP level.
Growth
Rising energy prices, particularly for natural gas and
electricity, could hold back growth momentum in the
short term.
Inflation
The job market will advance in its recovery in 2022,
the unemployment rate standing at 7.5% vs. 7.9% in
2021.
Employment
High deficits will moderate in 2022 and 2023. Debt
will stand at around 100% of GDP.
Public deficits

In 2021, employment in the Eurozone will increase by 1.3 million
workers, 0.8% year-on-year
8
3.6
15.2
7.9
7.1
8
3.4
14.3
7.5
6.7
7.9
3.2
13.9
7.3
6.5
Francia Alemania España Eurozona UE
2021 2022 2023
Forecasts from 2021
-2,5
1.3
1.7
1.1
-1.5%
0.8% 1%
0.7%
-2%
-1%
0%
1%
2%
-3
-2
-1
0
1
2
2020 2021 2022 2023
Employment change (millions) Employment change (%) (right axis)
Eurozone employment is recovering
Regional differences in unemployment remain
Spain will continue to be one of the countries most affected
by unemployment, standing at 13.9% in 2023
% active population
France Germany Spain Eurozone EU

-5.7 -5.7
-2.7
-1.2
99.3
97 97
97,5
98
98,5
99
99,5
100
-6
-5
-4
-3
-2
-1
0
2020 2021 2022 2023
Saldo primario Deuda (eje dch)
Eurozone high debt
High rates of spending and public debt largely stemming from the measures applied to lessen the impact of the pandemic
Total spending will gradually decrease to reach 47.9% of GDP in 2023
% GDP
A moderate reduction in debt is expected as the primary balance
improves, from 100% in 2021 to 97% in 2023
% GDP (debt in right axis)
Primary balance Gross debt
46.6
46.1
45.5 45.5
53.8
53.2
49.4
47.9
2020 2021 2022 2023
Ingresos totales Gastos totales
Total revenues Total expenditures

-9.3
7.8 7.9
5.4
-8.6
8.6
8.1
5.8
-4.6
2.7
4.6
1.7
2020 2021* 2022* 2023*
Exportaciones Importaciones PIB
Exports Imports GDP
3.8
3.6
3.4
3.2
2.7
-2.2
-2.7
-0.2
2020 2021* 2022* 2023*
Desempleo Costes reales laborales unitarios
Unemployment Real Unit Labor Costs
Germany full recovery
A GDP growth rate of 2.7% in 2021 will accelerate to 4.6% in 2022,
in a context of a negative contribution from external demand
Unemployment will stand at 3.6% on average in 2021, while labour
costs will decrease by 2.2% annually
%
*Forecasts

-9.7
6.9
4.8
1.7
-10.8
5.5 5.9
1.9
-6.3
12.9
1.8
3.2
2020 2021* 2022* 2023*
PIB Consumo privado Consumo público
*Forecasts
GDP Private consumption Public consumption
-9.8
7.2
5.2
2.1
0.8
-0.2 -0.4 -0.4
2020 2021* 2022* 2023*
Demanda doméstica Exportaciones netas
Domestic demand Net exports
United Kingdom significant dynamism in domestic demand
In 2021, public consumption is leading growth at 12.9%, while in
2022 private consumption will take its place (5.9%)
Domestic demand has contributed 7.2 points to GDP growth while
net exports will decrease by 0.2%, a trend that will continue in 2022
% contribution to GDP

Summary
Economic situation
Health, economic and political
uncertainty
Delayed recovery
Slow roll-out of European funds
Overdue structural reforms
1
2
3
4
30
2021 will be a year of recovery, but less intense than initially expected.
According to the European Commission, the Spanish economy will grow
by 4.6%, compared to the 6.2% estimated in July. Spain has gone from
being the Eurozone economy forecast to be the second fastest-growing
one in 2021 to being the 13th. Various factors have led to this downward
revision of forecasts. Although health-related uncertainty has decreased
due to the vaccination campaign’s brisk pace in our country, doubts
remain about the pandemic’s future evolution due to the current
outbreak in Europe stemming from the appearance of new Covid-19
variants, which are potentially more dangerous and transmissible. In
addition, the disruption of global supply chains, price rises and the delay
in receiving and implementing European funds linked to the Recovery
and Resilience Plan have negatively impacted the Spanish economy’s
evolution.
Receiving European reconstruction funds, their optimal and transparent
allocation and efficient roll-out, together with implementation of the
necessary structural reforms will be essential for the recovery’s strength
in a scenario in which the Spanish economy’s main imbalances have
worsened: high levels of public debt and deficit, and high unemployment
rates, especially among young people.

1
2
3
4
Efficient and transparent roll-out of European funds associated with
the Recovery and Resilience Plan (RRP).
The Welfare State’s fiscal consolidation and sustainability.
Implementation of the structural reforms needed to achieve a
competitive, sustainable and inclusive economic model.
Digital transformation and improvement of the education and
training system.
SOLID
RECOVERY
Challenges for the Spanish economy
In an international context marked by the uncertainty stemming from the pandemic’s persistence, there are bottlenecks in global distribution chains and
inflationary pressures, mainly on energy and raw material prices.
31

Risks for the Spanish economy´s recovery
32
Recovery based on
Risks
The pandemic’s persistence and worsening, mainly in Europe
Bottlenecks stemming from interruptions in global value chains
Inflationary pressures, mainly in energy and raw material prices
Shortage of job offers for posts arising from environmental and digital transition
Delay in the roll-out of European funds and a lack of concreteness for the required reforms
▲ Business costs
▼ Production
▼ Exports
▼ Investment
▼ Competitivity
Less health-related uncertainty due to progress in the vaccination campaign
Greater public and private investment driven by European funds from the Recovery, Transformation and Resilience Plan
A gradual improvement in tourism
Increase in private consumption supported by spending part of the savings accumulated in the pandemic and by a recovery in
employment
Uncertainty around legal safeguards in the employment area and a forecast of tax/cost increases

Forecasts: recovery of preCovid levels in 2023
-10.8%
2020
4.6%
2021
5.5%
2022
4.4%
2023
Source: Círculo de Empresarios based on IMF, Spanish Government, Bank of Spain, European Commission, FUNCAS and OECD, 2021.
33
European Commission
(Nov. 2021)
The main national and international organizations have revised growth forecasts downward for Spain given the lower-than-expected growth figures published by
the INE, the delay and lack of transparency in receiving and implementing European funds linked to the Recovery and Resilience Plan, and global uncertainty
stemming from the pandemic’s worsening evolution, especially in Europe, as well as distortions in global value chains and inflationary pressures. The OECD
projects preCovid levels of GDP in Spain not to be recovered before Q1 2023.
Spain has gone from being, in the July
2021 forecasts, the 2nd Eurozone
economy with the highest expected
growth in 2021 (+ 6.2%, 1.4 pp more
than the European average), to being
the 13th (4 tenths below the European
average)
6.5
6.3
5.7
4.8
4.6 4.5
7.0
5.9
6.4
5.7
5.55,5 5.5
Government
(Oct. 21)
Bank of Spain
(Sep. 21)
IMF
(Oct. 21)
FUNCAS
Consensus
(Nov. 21)
European
Com.
(Nov. 21)
OECD
(Dec. 21)
2021 2022

0
5000
10000
15000
20000
25000
30000
35000
40000
07-Feb-20
08-Mar-20
07-Apr-20
07-May-20
06-Jun-20
06-Jul-20
05-Aug-20
04-Sep-20
04-Oct-20
03-Nov-20
03-Dec-20
02-Jan-21
01-Feb-21
03-Mar-21
02-Apr-21
02-May-21
01-Jun-21
01-Jul-21
31-Jul-21
30-Aug-21
29-Sep-21
29-Oct-21
28-Nov-21
92.5% 91.9% 91.8%
88.5%
86.8%
84.2%
83.3% 82.8% 82% 81.2% 80.8% 80.3%
Ireland
Portugal
Malta
Denmark
Belgium
Spain
Finland
Sweden
Italy
France
Germany
Netherlands
Population > 18 years Total population
Health situation Risk of a new outbreak?
Source: Círculo de Empresarios based on Ministry of Health, Statista and European Centre for Disease Prevention and Control, 2021.
34
More than 80% of adult population in Spain is fully vaccinated, the
sixth country in the EU with the highest percentage
The high vaccination rate in Spain reduced health-related uncertainty, although the pandemic’s current worsening in Europe and the gradual increase in cases
in Spain are beginning to raise concerns about the possibility of new restrictions.
Top 12 EU countries in % of fully vaccinated population
Covid-19 transmission is beginning to increase
Number of daily cases; moving 7-day average

2021 Q3 GDP solid recovery?
External demand is increasing its positive contribution to growth
Source: Círculo de Empresarios based on INE, 2021.
In the Q3 2021, GDP grew by 2.7% year-on-year and 2% quarterly, mainly supported by increased
consumption (+ 1.6% year-on-year) and exports (+13.7%)
% year-on-year and quarterly change, and GDP contribution (pp)
35
2
-21.5
17.5
2.7
-25
-20
-15
-10
-5
0
5
10
15
20
25
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Domestic demand (pp)
External demand (pp)
GDP (% quarterly change)
GDP (% year-on-year change)
Per sector
Agriculture
▼ 10% year-on-year
Industry ▲ 0.4% year-on-year
Industry and construction
Services
+ 3.3 points, offsetting construction’s (-0.5) and
agriculture’s (-0.3) negative contribution
Services are driving growth
2.5%
20.1%
67.6%
Construction ▼ 8.2% year-on-year
▲ 4.8% year-on-year

Expectations are still favorable
PMIs have been moderating in recent months after maximum
levels in June; there’s concern about delivery times and costs
Source: Círculo de Empresarios based on Markit, INE and CIS, 2021.
The Consumer Confidence Index remains above its pre-crisis level
> 50: activity growth
> 100: consumer positive perception
36
87.2
49.9 48.5
97.5 98.3
97.3
40
50
60
70
80
90
100
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
130.6
95.5 95.5
105.5 109.3
114.8
128.9 130.3
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
The Business Confidence Index has recovered its pre-pandemic levels
> 100: positive perception
30.8
60.4
57.4
7.1
62.5
56.6
5
10
15
20
25
30
35
40
45
50
55
60
65
70
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
Manufacturing PMI
Services PMI

Employment and unemployment LFS– Q3 2021
Source: Círculo de Empresarios based on INE and Bank of Spain, 2021.
In the Q3 of 2021, the workforce fell by 2%
% year-on-year change and % labour force (right axis)
Unemployment rate < Spanish average (14.57%)
Unemployment rate > Spanish average (14.57%)
Unemployment rate by regions
9.9%
10.7%
10%
12.2%
8.8%
11.8%
10% 10.9%
10.2%
12.3%
14.6%
16.1%
15.3%
10.6%
22.5%
17.9%
23.9%
37
14.41
15.33
16.26
16.13
15.98
15.26
14.57
13
14
14
15
15
16
16
17
17
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
18
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Unemployment rate Labour population
Occupied Unemployed
14.57
% labour force

Moderate reactivation of the job market
Source: Círculo de Empresarios based on Ministry of Labour and Social Economy, Ministry dof Inclusion, Social Security and Migrations and Bank of Spain, 2021.
In Nov. 2021, registered unemployment fell for the 7th month in a row to 3.18
million people (-17.4% year-on-year, the largest historical fall), and Social
Security affiliation stabilized its advance (3.8%) and reached 19.75 million
The level of effective Social Security affiliation in August was
1.5% below its pre-pandemic level
% var. vs. Feb. 2020. Average seasonally adjusted figures for the month
5.6%
total
Agriculture 11.7%
total
Industry 6.7%
total
Construction
Affiliation by sectors Nov. 2021
76.1%
total
Services
38
-23.2
-1.5
-25
-20
-15
-10
-5
0
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
Labour force adjustment plan (ERTE)
Affiliation
Efective affiliation (total-ERTE)
-2% year-on-year +2.4% year-on-year +3.9% year-on-year +4.5% year-on-year
-20
-15
-10
-5
0
5
10
15
20
25
30
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
Unemployed Affiliates

Public finances impacted by the pandemic
Public debt PPAA
Up to Sep. 2021
122.1% GDP
Public deficit Central Gov.
Up to Oct. 2021
% PIB
2,53
Source: Círculo de Empresarios based on IGAE and Bank of Spain, 2021. 39
1,432.3
13.8
9.5
0
2
4
6
8
10
12
14
1100
1150
1200
1250
1300
1350
1400
1450
Jan-18
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
Jan-20
Mar-20
May-20
Jul-20
Sep-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Sep-21
PPAA debt % year-on-year change (right axis)
bn€ %
-54.191
-100000
-90000
-80000
-70000
-60000
-50000
-40000
-30000
-20000
-10000
0
Ene.
Feb.
Mar.
Abr.
May.
Jun.
Jul.
Ago.
Sep.
Oct.
Nov.
Dic.
2019 2020 2021
Million €
4.48
% GDP
bn€
Year-on-year
change
Central Gov. 1,245 6.2%
AACC 312 3.4%
Soc. Sec. 92 22.7%
Local Entities 22 -5.6%

74.855
91.855
Jan-20 Jan-21
Significant doubts about Social Security sustainability
Source: Círculo de Empresarios based on Ministry of Inclusion, Social Security and Migrations, 2021.
Revenues
Expenditure
€139.78 bn
Total non-financial revenues 76.6%
SOCIAL
CONTRIBUTIONS
€145.72 bn
Total non-financial expenditures
73.4%
PENSIONS
8.1%
year-on-year
22.8%
CURRENT
TRANSFERS
10%
year-on-year
3.3%
year-on-year
11.3%
SUBS. & OTHER
PROVISIONS
-1.7%
year-on-year
Up to Oct. 2021, the system´s déficit increased by 7,1% year-
on-year to €5.937 billion
Billion €
40
3.2%
year-on-year
3.3%
year-on-year
-5.544 -5.937
Jan.-Oct. 20 Jan.-Oct.21
7.1%
Billion €
22.7%
In Sep. 2020, the Social Security accumulated a debt of
€91.855 billion (7.9% of GDP).

Rise in inflation due to the increase in energy prices
Source: Círculo de Empresarios based on INE and Eurostat, 2021.
The CPI rose by 1.4 points to 5.4%, its highest figure since Sep. 1992.
The CPI flash estimated registers its annual rate as 5.6% in November
(1.7% for core CPI)
This rise is mainly explained by the increase in energy and
raw material prices
41
Contribution to the annual CPI change in October 2021 (pp)
0.749
0.302
0.091
0.062
0.047
0.032
0.025
0.019
0.015
0.009
0.003
-0.039
Housing
Transport
Communications
Hotels, cafes and restaurants
Leisure and culture
Food and non-alcoholic beverages
Alcoholic beverages and tobacco
Education
Household goods
Other goods and services
Medicine
Clothing and footwear
5.4
5.6
1.4 1.7
4.9
-2
-1
0
1
2
3
4
5
6
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
CPI Spain
Core CPI Spain
HCPI Eurozone

+21.9% year-on-year
26.2
-0.1
-56.4
19.5
-60
-50
-40
-30
-20
-10
0
10
20
30
Q3 2018 Q3 2019 Q3 2020 Q3 2021
%
year-on-year
change
Deficit Exports Imports
Exports
+22.1% year-on-year
Jan.-Sep. 2021
Top 3 exports by sector (% total)
Consolidated recovery of foreign trade
Source: Círculo de Empresarios based on Ministry of Industry, Trade and Tourism, 2021.
€230 bn
Imports
Balance
€-13.3 bn 24.4 % 25.1 %
Exports by destination
61.7%
EU-27
54.4%
Eurozone
38.3%
Extra- EU
18.5 %
% total
42
€243.2 bn
Energy € -16.6 bn
The trade balance deficit increased by 19.5% year-on-year due to its energy segment, whose negative balance grew by 46.1% year-on-year.
Non energy € +3.1 bn
Capital goods
18.8%
Food, beverage
and tobacco
18.2%
Chemicals
16.9%

81,838.5
18,576.6
27,526
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.000
100.000
Ene. Feb. Mar. Abr. May. Jun. Jul. Ago. Sep. Oct. Nov. Dic.
2019 2020 2021
Millions
€
74.5
17,9
24.8
0
10
20
30
40
50
60
70
80
90
Jan. Feb. Mar. Apr. May. Jun. Jul. Aug. Sep. Oct. Nov. Dec.
Millions
tourists
2019 2020 2021
year-on-year
Arrivals of international tourists
+39.3%
Up to Oct. 2021
Tourism has improved its evolution vs. 2020
Source: Círculo de Empresarios based on Ministry of Industry, Trade and Tourism, 2021.
24,830,991 tourists
year-on-year
Tourist expenditure
+47.9%
Up to Oct. 2021
1,109 € per tourist
27,526.2 M€
6.2%
year-on-year
43
Up to Oct. ’21, the accumulated
number of visiting tourists was
still 66.7% below the same
period’s level in 2019

Company creation and dissolution has normalized
Company creation and dissolution has returned to Q3 2020
levels
Number of companies and % year-on-year change (right axis)
Q3 2021 Business creation by Autonomous Regions
% of the total established companies in Q3 2021
> 10% of total established companies
3%
0.7%
0.7%
0.5%
1.8%
2.6%
2.8% 19.2%
3.9%
1.2%
2.5%
12.5%
3.1%
3.4%
15.9%
1.2%
3.8%
44
-60
-40
-20
0
20
40
60
80
100
120
140
160
0
5000
10000
15000
20000
25000
30000
Q1 2020 Q2 2020 Q3 2020 Q1 2021 Q2 2021 Q3 2021
Established Dissolved
% year-on-year creation % year-on-year dissolution

Reactivation of real estate activity following the pandemic
The buying and selling of real estate, 37.6% and 8.5% above the
same period in 2020 and 2019 respectively
* Includes previous credit negociations
Number property sales
Jan.-Sep. 2021
45
0
100000
200000
300000
400000
500000
600000
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
New Second-hand Total
114.7
66.4
141.7
35
55
75
95
115
135
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
Credit for house purchases Consumer credit Other*
New loans for house purchase are 27 points above the pre-
pandemic level (Feb. 2020)
New household credit operations. Base 100 = average 2019
Jul. 2021

MARKETS

Stock markets: a bullish trend, but…
The MSCI World stock market index is seeing record highs
Source: Círculo de Empresarios based on Statista and MSCI, 2021.
The main stock market indices in advanced economies appreciated in the third quarter, mainly due to corporate profits’
positive evolution. The latest wave of the pandemic and inflationary pressures slowed this trend at the beginning of the
fourth quarter
The IBEX hasn’t recovered its pre-crisis levels, affected by the
pandemic’s impact on the leisure and tourism sectors
January 2020 = 100
Price US$
47
1,852.7
3.174,7
1800
2000
2200
2400
2600
2800
3000
3200
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
+71.4%
60
70
80
90
100
110
120
130
140
150
160
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
IBEX
S&P 500
Eurostoxx-50
MSCI emerging economies

Fixed income: a rate increase
The Spanish risk premium remains around 70 bp, with a
differential of almost 60 points vs. Italy
pb
Source: Círculo de Empresarios based on Investing, 2021.
Rising inflation is pushing up long-term sovereign yields
An upturn and subsequent correction in the 10-year bond yield
48
100 = average 2020
50
70
90
110
130
150
170
190
210
230
250
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
Spain Italy
0
50
100
150
200
250
300
350
400
Jul-05
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Spain Germany US UK

Thank you

Global and-spanish economic perspectives Q3 2021 Quarterly Report December 2021

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Global and-spanish economic perspectives Q3 2021 Quarterly Report December 2021

Similar to Global and-spanish economic perspectives Q3 2021 Quarterly Report December 2021 (20)

Recently uploaded

Recently uploaded (20)

Global and-spanish economic perspectives Q3 2021 Quarterly Report December 2021