Spain | Consumption shackles growth

Summary

Several institutions, including BBVA Research, have upgraded their GDP expectations for Spain. However, different factors are limiting the growth of private consumption.

Key points

• Key points:
• The slow recovery of household spending may negatively impact their perception of the benefits of the current expansionary period.
• It would appear that neither the economic uncertainty nor the increase in the return on savings can explain the different path followed by savings in Spain; nor, for that matter, investment needs or immigration.
• Mechanisms such as inequality in income growth, the fall in net household wealth in real terms, or the anticipation of tighter fiscal policies, appear to be more important.
• The expectation that these factors will continue suggests that private consumption will remain constrained as a driver of growth.

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