Spain | Catalonia sees an unprecedented and heterogeneous fall in consumption

Summary

The drop in household spending is unprecedented. BBVA's credit card spending data went from an increase of around 10% in Catalonia before the state of alarm to a drop of almost 60% following its implementation.

Key points

• Key points:
• Families in Catalonia all but stopped spending in bars and restaurants, leisure, accommodation, travel agencies, etc. This was only partially offset by increased food spending which has rocketed by 60% since the second half of March.
• The situation in the labor market is having an important effect on household expenditure — the number of people affected by a Temporary Employment Plan (ERTE) or by unemployment could reach around 28% of Catalonia's workforce.
• The gradual easing of confinement measures should improve economic activity. In fact, following the transition from phase 0 to phase 1, the reduction in credit card spending moderated by 19 pp in Catalonia.
• Going forward, the key will be how effective the exit strategy is at limiting contagion, while GDP recovers.

Geographies

Topics

Tags