This quarterly report summarizes the key economic indicators and outlook for the Spanish economy in Q1 2015. It finds that GDP growth is improving, rising an estimated 2.8% in 2015 and 2.7% in 2016, driven by increases in investment and private consumption. Unemployment dropped in Q1 2015 and inflation remains low. Exports continue to contribute strongly to economic growth, helping reduce Spain's current account deficit. However, public debt remains high at over 97% of GDP. Overall the report presents a moderately improving picture for the Spanish economy in 2015.

1. Quarterly Report
on the Spanish Economic
Situation
Q1 2015
Círculo de Empresarios
Madrid, April 2015

2. 2
GLOBAL SETTING

3. USA
3.1%
Mexico
3%
Brazil
-1%
Spain
2.5%
UK
2.7%
France
1.2%
Italy
0.5%
South
Africa
2%
India
7.5%
China
6.8%
Russia
-3.8%
Japan
1%
ASEAN-5
5.2%
Australia
2.8%
Germany
1.6%
Eurozone
1.5%
Predictions 2015
3
aASEAN-5: Philippines, Indonesia, Malaysia, Thailand and Vietnam
Source: World Economic Outlook, IMF - April 2015
Moderate and unequal acceleration

4. Evolution of per capita income
4
Source: IMF - April 2015
x 3,2
x 5,6
x3,4
x 6,7
x10
x25
0
10000
20000
30000
40000
50000
60000
1984 1989 1994 1999 2004 2009 2014
$
USA
Germany
Japan
Spain
Brazil
China
∆ Last 30 years

5. Prices of raw materials
5
Source: IMF, April 2015
80
90
100
110
120
130
140
150
160
170
180
190
200
210
220
230
240
250
2005M3
2006M3
2007M3
2008M3
2009M3
2010M3
2011M3
2012M3
2013M3
2014M3
2015M3
Index of raw material prices
2005 = 100
TOTAL
Non-energy raw
materials
Energy

6. Price of gold
6
Source: Bloomberg, April 2015

7. Depreciation of the euro
7Source: Bank of Spain, 2015
Depreciation of the euro, with the lowest exchange rate since the spring of 2003.
Greater competitiveness of European exports outside the eurozone and more expensive
imports.
1,35
1,45
1,32 1,31
1,38
1,07
1,00
1,05
1,10
1,15
1,20
1,25
1,30
1,35
1,40
1,45
1,50
2010 2011 2012 2013 2014 2015
US dollars per euro
9,20
9,47
8,32
8,10
8,62
6,65
6,50
7,00
7,50
8,00
8,50
9,00
9,50
10,00
2010 2011 2012 2013 2014 2015
Yuan per euro
0,88
0,89
0,82
0,85
0,82
0,72
0,7
0,8
0,9
2010 2011 2012 2013 2014 2015
Pounds sterling per euro
125,32
120,13
107,81
130,21
141,69
127,68
100,00
105,00
110,00
115,00
120,00
125,00
130,00
135,00
140,00
145,00
2010 2011 2012 2013 2014 2015
Japanese yen per euro

8. Stock market indices
8
Source: Inverco, 2015
Evolution of stock markets
%
2000 2002 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014
Dax 30 (Francfurt) -7.5 -43.9 7.3 22.0 22.3 -40.4 23.9 16.1 -14.7 29.1 25.5 2.7
Ibex 35 (Madrid) -21.7 -28.1 17.4 32.2 7.3 -39.4 29.8 -17.4 -13.1 -4.7 21.4 3.7
CAC 40 (Paris) -0.5 -33.7 7.6 17.5 1.3 -42.7 22.3 -6,0 -17.0 15.2 18,0 -0.5
Eurostoxx 50 (Euro) -2.7 -36.6 6.9 15.1 6.8 -44.3 22.2 -6.8 -17.1 13.8 17.9 1.2
FTSE 100 (London) -10.2 -24.6 7.7 10.7 3.8 -32.0 27.6 9.0 -5.6 5.8 14.4 -2.7
S&P (USA) -10.2 -23.3 9.3 13.6 3.5 -39.3 23.5 13.1 -0.3 11.8 31.5 11.4
Dow Jones (USA) -6.2 -16.8 3.7 16.3 6.4 -34.7 18.8 11,0 5.5 7.3 26.5 7.5
Nikkei 225 (Japan) -27.2 -18.6 7.1 6.9 -11.1 -42.1 19.0 -3.0 -17.3 22.9 56.7 7.1

9. Risks
9
Source: Inhouse and BBVA Research

10. 10
SPAIN

11. Development of GDP
11
Source: National Statistical Institute (INE), April 2015
0.9
-0.8
-1.6
2.6
-2,5
0.5
-4.3
4.1
-5
-4
-3
-2
-1
0
1
2
3
4
5
2015Q1
2014Q3
2014Q1
2013Q3
2013Q1
2012Q3
2012Q1
2011Q3
2011Q1
2010Q3
2010Q1
2009Q3
2009Q1
2008Q3
2008Q1
2007Q3
2007Q1
Quarterly Annual
%

12. Improved outlook for growth
12
The Bank of Spain predicts a rise in GDP of 2.8% in 2015 and of 2.7% in 2016, supported
by an increase in investment (5.9 and 6.7%, respectively). In addition, the Bank foresees
a growth in private consumption of 3.3% in 2015.
These predictions are in line with those of FUNCAS, of 2.6% (2015) and 2.6% (2016),
and surpass those of the European Commission (2.3% in 2015 and 2.5% in 2016), the IMF
(2.5% in 2015 and 2% in 2016), and the OECD (1,7% and 1.9%).
2.8
2.7
-6
-4
-2
0
2
4
6
8
2013 2014 2015* 2016*
GFCF
Exports
GDP
* Forecasts
Source:Bank of Spain, March 2015

13. Prices: CPI and underlying CPI
13
Source: INE, April 2015
The annual general Consumer Price Index rose from -1.07% to -0.66%. For its
part, the underlying CPI (not counting energy and fresh foods) went from
0.15% to 0.20%.
CPI
-0.7
Underlying
0.2%
-2,0
-1,0
0,0
1,0
2,0
3,0
4,0
5,0
6,0
2015M03
2014M03
2013M03
2012M03
2011M03
2010M03
2009M03
2008M03
2007M03
Annual development of general CPI and
underlying CPI

14. Interest rates
14
The risk premium is around 100 basis points.
Source: Bank of Spain, April 2015
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
Returnon10-year bonds inSpainand Germany
Spain
Germany
Riskpremium

15. Situation of public accounts (I)
15
 Reform Public
Administrations
 Necessary
fiscal reform.
 New measures
against fraud
and the black
economy.
Source: IMF, April 2015
40.5 40.9
36.7
34.8
36.2 36.0
37.0 37.5 37.838.3
38.9
41.1
45.8 45.6 45.4
47.3
44.3
43.6
30
32
34
36
38
40
42
44
46
48
50
2006 2007 2008 2009 2010 2011 2012 2013 2014
Structure of income and public spending as a % of GDP
Income Spending

16.  From a surplus of 2% in 2006 to a deficit of 11% in 2009.
 5.8% in 2014, according to Eurostat, second highest in the Eurozone
after Cyprus.
 The State deficit until March rose to 9,854 million euros, some 3% more
than in the same period of 2014.
 The public debt rose from 36.3% in 2007 to 97.7% in 2014.
16
Situation of public accounts (II)
-12
-10
-8
-6
-4
-2
0
2
4
2006 2007 2008 2009 2010 2011 2012 2013 2014
Public deficit, 2006-2014
% GDP
Germany France
UK Spain
Source:IMF, April 2015
30
40
50
60
70
80
90
100
110
2006 2007 2008 2009 2010 2011 2012 2013 2014
Public debt, 2006-2014
% GDP
France
Germany
Spain
UK
Source:IMF, April 2015

17. The private sector reduced its debt by 477,000 million euros since the
end of 2008.
Deleveraging of the private sector
17
Source: Inhouse based on data from the Bank of Spain, 2015
115,5
89,1
83,4
70,7
60
70
80
90
100
110
120
2007 2008 2009 2010 2011 2012 2013 2014
%GDP
Financing of non-financial companies and
families
Companies
Families

18. 18
Labor market (I)
Unemployment dropped in the first quarter of 2015 by 13,100 persons,
the largest drop in a first quarter since 2005.
23.8
26.9
9.6
Unemployment rate
% of total labor force
Source: EAPS 1Q2015 (INE)

19. 19
Labor market (II)
20.1
21.6
25.0
26.1
24.4
22.2
20.5
20
21
22
23
24
25
26
27
2010 2011 2012 2013 2014 2015* 2016*
Forecastsfor the unemployment rate
% of active population
* Forecasts
Source:Bank of Spain, March 2015

20. 90
95
100
105
110
T1-2007
T2-2007
T3-2007
T4-2007
T1-2008
T2-2008
T3-2008
T4-2008
T1-2009
T2-2009
T3-2009
T4-2009
T1-2010
T2-2010
T3-2010
T4-2010
T1-2011
T2-2011
T3-2011
T4-2011
T1-2012
T2-2012
T3-2012
T4-2012
T1-2013
T2-2013
T3-2013
T4-2013
T1-2014
T2-2014
T3-2014
T4-2014
Evolución costes laborales unitarios, 2007-2014
2010=100
Alemania
Francia
RU
España
Productivity
20
Starting in 2011, Spain will increase its productivity by reducing labor costs.
Germany
France
UK
Spain
Development of labor costs, 2007-2014
Source: OECD, 2015

21. 21
Family net financial wealth (financial assets less debt) remains at 1.1
billion euros.
Situation of household wealth (I)
Source: Inverco and inhouse, 2015
-0.8
1.1
0.8
0.1 0.7
1.0
1.1
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
Net financial wealthof families
Billion of euros
Deposits and cash
Other financial
assets*
Financial liabilities
NET FINANCIAL
WEALTH
*Other financial assets:pension funds, insurance, fixed income...

22. 22
The net wealth of families (financial wealth plus real estate wealth
without debt) doubled between 1999-2013, from 2.7 to 5.3 billion
euros.
Situation of household wealth (II)
Source: Bank of Spain, Inverco and inhouse, 2015
-0.8
2.0
4.2
2.7
7.2
5.3
1.1
-1,0
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Net wealthof families
Billions of euros
Real estate wealth
Financial assets
Financial liabilities
NET WEALTH

23. Internationalization (I)
23
-10,0
0,8
0,1 0,4
-12
-10
-8
-6
-4
-2
0
2
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 2015*
Historic change in the current account balance in 5 years.
After 26 years, the Spanish economy ended 2013 and 2014
with a surplus in its current account.
Evolution of Spanish current account, 2000-2015
% GDP
Estimated*
Source: IMF, 2015

24. 24
Advance in the contribution of exports to the GDP:
from 22.7 % in 2009 to 32% in 2014
Internationalization (II)
-10
0
10
20
30
40
50
60
70
80
90
Portugal
ESPAÑA
Holanda
EEUU*
Alemania
Francia
Corea*
RU
China*
Chile
p
%
X/PIB 2014 Variación 2009-2014
*2013
Source: OECD, 2015
Exports as part of GDP
50
100
150
200
250
300
350
1999
2001
2003
2005
2007
2009
2011
2013
Exports.MainEuropeanexportersvs.
Spain
(base 100 =1999)
World
Spain
Netherlands
Germany
Italy
UK
France
Source:WTO (2015) and in-house
Portugal
Spain
Netherlands
USA*
Germany
France
Korea*
UK
China*
Chile
X/GDP
2014
Variation, 2009-2014

25. New markets and important growth
of exports to Asia and the Americas.
Diversified and added value
exports
25
Internationalization (III)
Diversification –both geographically and by product– is the key to
relaunching the Spanish exports.
-20,0
-10,0
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
EU28 America Asia Africa Rest of
Europe
Rest of
world
Geographical diversification
%
% of total 2014 Variation 2014/2013
Source: Datacomex (2015)
-15
-10
-5
0
5
10
15
20
25
30
Diversification by products
%
% of total Variation
Source: Datacomex (2015)

26. Leadership in tourism– 2014 was a record year
26
Internationalization (IV)
In the first quarter of 2015 there were 10.6 million arrivals of non-residents, an
increase of 5.3% over the same period of 2014, with more Asian and British
citizens. In the first quarter of 2015 their spending increased by 7% with regard
to the same period of 2014.
Source: WTO, 2015

27. 27
Spanish and foreign investment
0,0
5,0
10,0
15,0
20,0
25,0
Inversores extranjeros en España
% del total en 2014 y variación 2014/2013
-12
-41,8 -61,4
-11,6
82,8
21,7
56,41.030
112,6
108,2
-71,2
0
10.000
20.000
30.000
Inversión productiva (sinETVE)
+9.8%
interannual
Spanish investment overseas, 2000-2014
Millions of euros
Source: : Ministry of the Economy, Registry of Overseas Investment (2015)
Source: Ministry of the Economy, Registry of Overseas Investment (2015)
Productive investment
Foreign investors in Spain
% of total in 2014 and variation 2014/2013

28. 28
Spain’s position in international rankings

29. www.circulodeempresarios.org