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Commodities (I): Oil on rise
Source: Círculo de Empresarios based on EIA y Bloomberg, 2017 21
In 2017, the medium price of Brent was 54 $/barrel, 10$ above 2016
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Stronger global economy
OPEC oil cuts
US oil inventory reductions
Geopolitical tensions
Brent barrel price ($)
69$
135$
26$
Brent Forecast 2018:
[60$-70$ ]
Reasons for higher prices](https://image.slidesharecdn.com/quarterly-report-4q-february-2017-circulo-de-empresarios-180205155050/75/Global-and-Spanish-economy-4Q-17-and-outlook-2018-21-2048.jpg)
Uploaded byCírculo de Empresarios
Global and Spanish economy 4Q-17 and outlook 2018
The document presents an analysis of global and Spanish economic performance for Q4 2017 and projections for 2018, highlighting a synchronized growth exceeding expectations across geographic areas. It discusses factors like U.S. tax reforms, geopolitical uncertainties, monetary policy adjustments, and their impacts on various economies, including China, Latin America, and Europe. Additionally, it provides forecasts and challenges ahead such as inflationary pressures and political risks, particularly in Spain due to uncertainty in Catalonia.
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Global and Spanish economy 4Q-17 and outlook 2018
- 1. Global and Spanisheconomy 4Q-17 and outlook for 2018 February 2018 QUARTERLY REPORT
- 2.
- 3. 2017 GDP growthand forecasts for 2018 Source: Círculo de Empresarios based on IMF, January 2018 3 1,8 2.3 2.7 2 2.3 1.3 1.9 2.4 2.2 6.8 6.6 CHINA EUROZONE LATIN AMERICA MEXICO USA BRAZIL 1.1 1.9 RUSSIA 1.8 1,7 Growth extended across all geographic areas and exceeded expectations GLOBAL 3.7 3.9 AFRICA 2.7 3.3 Real GDP growth(%) 2018 2017
- 4. 2017 Key facts Source:Círculo de Empresarios, 2018 4 US exit from TPP agreement Art. 50 is activated China’s rating downgrade UK Elections NAFTA renegotiations Fed announced balance sheet reduction ECB announced QE reduction January-February March April-May June Macron: new president of France AugustSeptemberOctober-November Fed interest rate hike Trump’s Tax reform Fed interest rate hike December Once again, a year marked by political uncertainty Fed interest rate hike illegal referendum in Catalonia
- 5. Source: Círculo deEmpresarios, 2018 5 Forecasts for 2018 1 2 3 Robust and synchronized growth Gradual withdrawal of monetary stimulus in advanced economies Political uncertainty remains 4 High valuations in Financial markets Strengths and risks
- 6. 58% 42% 88% 12% 97% 3% Source: Círculo deEmpresarios based on FMI, JP Morgan, Markit, 2018 6 Positive behavior of global growth For the first time since 2010, the global economy exceeds the forecast of economic expansion 54 % Countries with positive growth 2009 2012 2018 GLOBAL PMI 54.5 50 level Expansion Contraction December 2017 Countries with positive growth Countries with negative growth
- 7. Source: Círculo deEmpresarios based on IMF, JP Morgan, 2018 7 Growth in advanced and emerging countries The acceleration of emerging countries growth reflects the recovery in commodity exporters 56.3 52.2 Emerging Advanced Manufacturing PMI new maximum (December 2017) Note: values above 50 indicates expansion In parenthesis data of December 2016 (53.8) (51) Forescast 2.1 2.2 1.7 2.2 2.0 4.7 4.3 4.3 4.6 4.9 2014 2015 2016 2017 2018 Real GDP growth % Advanced Emerging
- 8. Source: Círculo deEmpresarios, 2018 8 Geopolitical uncertainty The process of globalization continues although there are pockets of trade protectionism JAPAN CANADA MEXICO TPP 12 (with USA) 38.3% global GDP TPP 11(without USA) 13.5% global GDP US leaves TPP The exit of US has not stopped trade negotiations * Australia, Brunei, Chile, Malaysia, Peru, New Zealand, Singapour, Vietnam The potential incorporation of South Korea, Taiwan, Thailand, Indonesia and Philippines would generate earnings of 500 billion $ (higher than initial agreement with USA) Possible TPP 16 1 2 NAFTA renegotiations worries Brexit trade consequences3 Trans-Pacific Partnership (TPP) (January 2017)
- 9. Inflation remained low,however... The 80% of OECD countries (+ China) are in full employment, which could lead to greater inflationary pressures for the next two years… Global inflation Source: Círculo de Empresarios based on JP Morgan, 2018 Unemployment and inflation rate OECD Unemployment reduction Wage growth Inflation potential growth GDP dynamism …Nevertheless, there are still deflationary forces such as aging population or low productivity which keeps wage growth in low levels 0 1 2 3 4 5 6 7 8 2015 2016 2017 2018 2019 Unemployment (% active population) Inflation (%)
- 10. Source: Círculo deEmpresarios based on IMF and Vanguard, 2018 10 China confirms a moderate slowdown The risks of a hard landing is reduced in 2018, but its level of total debt worries* Low intensity of industrial and real estate overcapacity 2017: 6.8% 2018: 6.6% Real GDP growth Supply side reforms and symptoms of openness Positive advance in services sector activity 1 2 3 *IMF estimate that total debt will reach 300% of GDP in 2022 (actual: 230% PIB)
- 11. Source: Círculo deEmpresarios based on World Bank, 2018 11 Economic recovery in Latin America and Russia Argentina, Brazil and Russia exit recession Text goes here goes here goes here goes here goes here goes here goes here goes here goes here. Step 2 Text goes here goes here goes here goes here goes here goes here goes here goes here goes here. Step 3 Text goes here goes here goes here goes here goes here goes here goes here goes here goes here. Step 1 Step 2 Step 3 Text goes here goes here goes here goes here goes here goes here goes here goes here goes here. Step 1 Step 2 Higher growth prospects for Mexico (due to US demand dynamism), Brazil’s economic recovery and the upward cycle of commodities stimulate emerging countries growth Growth better than expected in Russia due to higher oil prices, greater flexibility in exchange rate and fiscal stimulus Latin America Russia
- 12. Source: Círculo deEmpresarios based on IMF, January 2018 12 US: upward economic forecast (I) The Tax Reform raises growth forecasts for 2018 2.72.31.5 2016 2017 2018 (PMI: 54.3) (PMI: 55.1) Real GDP growth (%) Note: PMI data correspond to end of the year
- 13. Source: Círculo deEmpresarios based on Joint Committee on Taxation, 2018 13 US: Tax Reform impact (II) The US Senate approved Trump’s Tax Reform Simplification of tax brackets from 7 to 4 Corporate Tax reduction from 35% to 20% Elimination of deductions Impact Reform GDP impact estimation between 0.06 and 0.36 points in the US economy in 2018 (Tax Foundation, Goldman Sachs, Joint Committee on Taxation, Wharton) Savings average for US citizens 1,610$ in 2018 (Tax Policy Center) The reform will add approximately 1 billion to debt in 10 years (Joint Committee on Taxation)
- 14. US: prices stability(III) Source: Círculo de Empresarios based on BLS y PIMCO, 2018 14 2-2.5 1.9 2017 2018 PIMCO estimates The economy and employment improvement (+171,000 average jobs created in 2017) reinforce the bullish expectations of inflation Inflation forecast % annual change 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 US inflation % annual change General Core Average inflation 50 years: 4.1%
- 15. 0 0,5 1 1,5 2 2,5 3 3,5 4 September 2017 December2017 Fed: new interest rate rise Source: Círculo de Empresarios based on Fed, 2018 15 The Fed raised interest rates in December to a range of 1.25-1.5% Fed dot plot, 2018 (%) Greenspan Bernanke Yellen Powell (Effective in February 2018) 3 expected hikes in 2018 Federal funds rate % 0 1 2 3 4 5 6 7 Jul-00 Jun-01 May-02 Apr-03 Mar-04 Feb-05 Jan-06 Dec-06 Nov-07 Oct-08 Sep-09 Aug-10 Jul-11 Jun-12 May-13 Apr-14 Mar-15 Feb-16 Jan-17 Dec-17 Note: Each dot represents a governor’s vote
- 16. 5 4 -4 1.5 2.4 0 1.6 3.3 4.1 3 4 3.4 2007 2008 20092010 2011 2012 2013 2014 2015 2016 2017 2018 0 50 100 150 200 250 300 2014 2015 2016 2017 2018 Hungary Poland Romania Czech Republic EU=100 The main economies of Emerging Europe grow at a faster pace than EU 28Inflation: 0.1% 2016 Unemployment : 5.3% 2.0% 2017 4.3% Source: Círculo de Empresarios based on IMF, 2018 Emerging Europe: stronger economic growth 2.6% 2018 4.1% Poland was the only country of the EU that avoid recession Main European emerging countries real GDP growth* *Average of the 4 main economies of emerging Europe: Poland, Romania, Czech Republic and Hungary % Forecast Emerging Europe growth vs EU 28 Average EU 28 Emerging Europe Forecast Forecast
- 17. Eurozone: growth greaterthan expected 17 2.4 2.2 2016 2017 2018 The greater external demand boosts its economic activity 1.8 1.7 Real GDP gowth (%) 1.6 1.6IMF forecast January 2017 IMF forecast January 2018 Source: Círculo de Empresarios based on IMF, January 2018
- 18. -1,0 ,0 1,0 2,0 3,0 4,0 5,0 6,0 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Sep-10 Feb-11 Jul-11 Dec-11 May-12 Oct-12 Mar-13 Aug-13 Jan-14 Jun-14 Nov-14 Apr-15 Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 UK: the reboundof inflation consolidates 18Source: Círculo de Empresarios based on ONS, IMF, 2018 Brexit negotiations move to second phase in a scenario of higher inflation and lower growth in UK Monthly inflation rate % annual change Inflation 2017 = 2.7% Real GDP growth % 2015 Referendum 2016 2017 2018 2.3 2014 1.9 1.8 1.5 3.1 Brexit Forecast
- 19. 0.50 0 1 2 3 4 5 6 7 Bank of Englandofficial interest rate 1.31 1.08 1.15 1,05 1,10 1,15 1,20 1,25 1,30 1,35 1,40 Exchange rate GBP / EUR Bank of England: rise in interest rates 19 Source: Círculo de Empresarios based on Bank of England, Investing, 2018 Bank of England raised the interest rates in November after inflation YoY was over 2% Brexit Brexit %
- 20. Italy: growth despitethe uncertainty The Italian general elections will be held on March 1.6 2 1.600 1.700 1.800 1.900 2.000 2.100 Italy 10 year borrowing costs(%) +27.8% Public debt % GDP 99.8 133 2007 2017 Private consumption Investment Exports Imports 1.21.5 3.83.2 3.55.1 3.75.5 Source: Círculo de Empresarios based on Eurostat, IMF BBVA Research, Investing 2018 -2.8 -1.7 0.1 0.8 0.9 1.6 1.4 2012 2013 2014 2015 2016 2017 2018 Real GDP growth % Macroeconomic indicators (%) Political risk Forecast
- 21. 0 20 40 60 80 100 120 140 Jan-88 Sep-89 May-91 Jan-93 Sep-94 May-96 Jan-98 Sep-99 May-01 Jan-03 Sep-04 May-06 Jan-08 Sep-09 May-11 Jan-13 Sep-14 May-16 Jan-18 Commodities (I): Oilon rise Source: Círculo de Empresarios based on EIA y Bloomberg, 2017 21 In 2017, the medium price of Brent was 54 $/barrel, 10$ above 2016 1 2 3 4 Stronger global economy OPEC oil cuts US oil inventory reductions Geopolitical tensions Brent barrel price ($) 69$ 135$ 26$ Brent Forecast 2018: [60$-70$ ] Reasons for higher prices
- 22. Commodities (II) 22Source: Círculode Empresarios based on JP Morgan, 2018 Actual =Lowest level in 10 years Highest level in 10 years 72.88 $ 88.17$ 46.84 $ 237.95$ 101.82$ 48.63$ 26.21 $ 69$ 145.29$ 84.23 $ 245.20$ 138.51$ Bloomberg Commodity Index Agriculture Crude oil Industrial materials Note: Prices are represented by the appropriate Bloomberg Commodity sub-index Metals and energy prices recovered in 2017
- 23. 60 65 70 75 80 85 90 95 100 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan.-18 Currency market Source: Círculode Empresarios based on St Louis Fed, 2018 23 Since the beginning of 2017, dollar depreciation against its main trading partners Dollar exchange rate against a weighted basket of currencies* 1973=100 • Includes euro, Canadian dollar, yen, pound, Swiss franc, Australian dolar and Swedish krona Maximums in 14 years Dollar against major foreign currencies, 2017 -4.5% -9% -4.2% -12%
- 24. Financial markets 24 Source: Círculode Empresarios based on JP Morgan, CNMV, 2018 Low financial volatility and US stock markets closed at records Stock market performance, 2017 % 98 103 108 113 118 123 128 133 138 US Stock markets Jan 2017=100 S&P 500 DJIA Global 20.1 S&P 500 19.4 Dow Jones 25.1 Nasdaq 28.2 Eurostoxx 50 6.5 Dax 30 12.5 Cac 40 9.3 Ibex 35 7.4 Nikkei 225 19.1 Korea Cmp. 21.8
- 25.
- 26. 2017 Review 26 ● Economicactivity remains solid (3.1% YoY), after several upward revisions of forecasts ● Job creation (2.7% YoY) and falling unemployment rate to 16.55% ● Rising tax revenues (4.1% YoY) ● New loans and default rates (November 2017) The strength of external sector Improvement in business competitiveness Eurozone best annual performance since the financial crisis Jan. - Nov. 2017 +10.5% YoY New credit* Default rate -13.9% YoY to 8.07% of total credits 2.5% (Real GDP growth 2017) Tourism record 81.8 million of international tourist arrivals Source: Círculo de Empresarios based on Bank of Spain, INE and Eurostat, 2018 + * New consumption and housing loans for households and non-financial corporations
- 27. Forecasts 2018: recoveryremains solid… … although growth slows 27 2017 2018* 2016 3.3% 3.1% 2.8% * Forecast Source: Círculo de Empresarios based on Afi and INE, January 2018 IMF reduces Spain´s growth forecasts from 2.5% to 2.4% due to political uncertainty, mainly in Catalonia IMF (Jan.18) 2.4% Bank of Spain (Dec. 17) 2.4% European Commission (Nov. 17) 2.5% OECD (Nov. 17) 2.3% Government (Oct.17) 2.3% Forecasts 2018 Spanish macroeconomic outlook % annual change 2016 2017 2018* Real GDP 3.3 3.1 2.8 Final consumption 2.5 2.1 1.8 Households 3.0 2.4 2.0 PPAA 0.8 1.0 1.0 GFCF 3.3 4.8 4.4 Capital goods 5.0 5.6 5.5 Construction 2.4 4.5 4.2 Domestic demand (1) 2.5 2.5 2.2 Exports 4.8 5.3 5.3 Imports 2.7 4.0 4.0 External demand (1) 0.8 0.6 0.6 CPI (annual average) -0.2 2.0 1.8 GDP Price Deflator 0.3 0.9 1.1 Nominal GDP 3.6 4.0 3.9 Employment 2.7 2.6 2.4 Unemployment rate 19.6 17.1 15.1 General government net lending/borrowing EDP (% GDP) -4.5 -3.1 -2.6 Public debt EDP (% GDP) 99.7 98.7 97.6 Current account balance (% GDP) 2.02 1.9 1.8 (1) Growth contribution
- 28. Downside risks in2018 28 Political uncertainty – mainly in Catalonia Effects of rising oil prices on domestic demand and on current account balance Paralyzed structural reforms Reduction of monetary stimulus by the ECB High level of public debt Structural unemployment
- 29. Tailwinds 29 Global and Europeaneconomic recovery Employment creation 2 millions in 4 years Debt reduction Mainly by private sectorprivado Monetary policy and favourable financial conditions Spanish economy competitiveness From 2012 → Non-energy trade surplus
- 30. Economic growth 2017(I) 2017 GDP = 3.1% • Private consumption = 2.4% • Public consumption = 1% • Gross fixed capital formation = 4.8% Domestic demand % annual change 2.5 ppgrowth contribution Source: Círculo de Empresarios based on Afi, January 2018 30 0.6 pp External demand Goods and services % annual change growth contribution • Exports = 5.3% • Imports = 4%
- 31. Current economic growth(II) Spain maintains its growth above EU average, although the positive gap is narrowing The Spanish GDP growth follows the Manufacturing PMI trend 31 Source: Círculo de Empresarios based on Markit, Eurostat and INE, 2018 Manufacturing PMI December 55.8 In parenthesis December 2016 (55.3)
- 32. GDP growth andemployment Spanish GDP has reached its pre-crisis level with a number of affiliates 3.8% below 2007 level Source: Círculo de Empresarios based on INE, January 2018 32
- 33. Labour market (I) 33Source:Círculo de Empresarios based on INE, 2017 Active Population Survey Q4 2017 (INE) 490,300 new jobs were created in 2017 and the unemployment rate dropped to16.55% (3,766,700 unemployed), more than 10 points below its maximum level of Q1 2013 8.01 26.94 Q4 2017 16.55 20,753,4 16,950.6 18,998,4 8,0 10,0 12,0 14,0 16,0 18,0 20,0 22,0 24,0 26,0 28,0 16.000 17.000 18.000 19.000 20.000 21.000 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 Employmentand unemploymentrate Q3 2007 - Q3 2017 Thousand; % labour force Unemployment rate Employment
- 34. Labour market: publicand private employment (II) 34Source: Círculo de Empresarios based on INE, 2017 18.9 millions of employees Private sector 15.9 millions Public sector 3.0 millions
- 35. Affiliates and unemployed2017 in 2017 New permanent contracts in 2017 35Source: Círculo de Empresarios based on Ministry of Employment and Social Security, January 2018 Affiliates to Social Security and unemployed From its peak in February 2013 (5,040,222), unemployment rate has decreased by 1,627,441 persons. 1.9 millions 35.6% conversions from temporary contracts 19,302,685 16,094,638 18,460,201 1,965,869 5,040,222 3,412,781 0 1.000.000 2.000.000 3.000.000 4.000.000 5.000.000 6.000.000 16.000.000 16.500.000 17.000.000 17.500.000 18.000.000 18.500.000 19.000.000 19.500.000 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Persons Affiliates Unemployed January 2018 Unemployment increased by 63,747 persons to 3,476,528 Affiliates decreased by 178,170 persons to 18,282,031
- 36. Unemployment rate inthe UE and in Spain Spanish unemployment rate is twice as high as the Eurozone average 36 Source: Círculo de Empresarios based on Eurostat, 2018 Spain remains among the top 3 countries with the highest youth unemploymet rate (< 25 years) Greece Spain Italy 40.8% 36.8% 32.2%
- 37. Pensions system 37Source: Círculode Empresarios based on Ministry of Employment and Social Security, January 2018 Number of pensions, average pension and public expenditure in pensions have been increasing since 2007… 2007 Jan. 2018 Millions 8.3 9.6 2007 679 930 2007 2017 % PIB 8.7 12.0 Pensions Average pension Public expenditure in pensions€ / month Total Retirement 4.9 5.9 767 1,075 Ratio contributor-pensionist 2007 2017 2.71 2.23 Reserve Fund The Spanish Treasury might lend the government €15 bn to finance extraordinary pensions in 2018 Social Security revenues ▲5.3% in 2017 Social Security deficit 23.4 years Pensionable ages (vs. 20.3 in OECD) Jan. 2018 Years after retirement 0,8 1,0 1,0 1,1 1,3 1,3 0,7 0,7 -0,2 -0,1 -1,0 -1,1 -1,0 -1,2 -1,6 -1,4 -2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(F) 2017(*) % GDP * targetStabiliy Programme 2017-2020 2011 € 66.8 bn 2017 € 8.1 bn
- 38. Prices are risingbelow the Eurozone average after 13 months maintaining a positive gap. 38Source: Círculo de Empresarios based on INE and Eurostat, 2018 Prices: CPI slowdown December CPI = 1.1% In January 2018, estimated CPI is 0.5%, its lowest level over the last 16 months, due to electricity prices drop
- 39. 39Source: Círculo deEmpresarios based on INE and Eurostat, 2018 Real state market Since 2015 housing prices and investment are recovering 0.8 1.1 2.5 1.7 5.3 -0.3 -1.7 10.3 9.6 2.5 4.2 1 8.5 2.4 0.9 6.3 5.6 Rent prices 2017 By regions -25,0 -20,0 -15,0 -10,0 -5,0 0,0 5,0 10,0 15,0 Construction investment % annual change Construction investment Housing investment Other
- 40. Financial conditions 40 Source: Círculode Empresarios based on Bank of Spain, 2018 Low interest rate environment keeps driving new financing operations Between Jan. and Nov. 2017, small and medium companies received most part of new loans to companies (< 1 million €)
- 41. Public accounts 41Source: Círculode Empresarios based on Ministry of Economy, Industry and Competitiveness, 2018 Deficit targets Jan. – Nov. 2017: tax revenues amounted to €180.3 bn (+4.1% YoY) Forecast 2017 → 200.9 bn (+7.9% YoY) * Private sector debt 2017 2018 2019 2020 General Government -1.1 -0.7 -0.3 0 Regional Administrations -0.6 -0.4 -0.1 0 Local Entities 0 0 0 0 Social Security -1.4 -1.1 -0.9 -0.5 Total PPAA -3.1 -2.2 -1.3 -0.5 35.6 39.4 52.7 60.1 69.5 85.7 95.5 100.4 99.4 99 98.1 1.9 -4.4 -11 -9.5 -9.3 -6.8 -6.7 -5.8 -5.2 -4.3 -3.1 0,0 20,0 40,0 60,0 80,0 100,0 120,0 12,0 10,0 -8,0 -6,0 -4,0 -2,0 0,0 2,0 4,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 General government net lending/borrowing and public debt % GDP Debt Net lending/borrowing Total 138.4% Households 61.8% Non-financial corporations 76.6%
- 42. 42 Spanish position withininternational trade Spain ranks among the top 5 goods exporters Share in world total exports (Spanish exports / world exports), % Source: Círculo de Empresarios based on Ministry of Economy, Industry and Competitiveness, January 2018 Share in world total exports 1 China 13.2 2 USA 9.1 3 Germany 8.4 4 Japan 4.0 5 Netherlands 3.6 … 16 SPAIN 1.8
- 43. 43 Trade balance, January– November 2017 (% annual change) Source: Círculo de Empresarios based on Ministry of Economy, Industry and Competitiveness, January 2018 External sector Imports Capital goods Chemical products Energy Exports ▲ 9.1% 255,155.1 M€ Imports ▲ 11.1% 277,849.2 M€ BALANCE ▲ Deficit 39.2% -22,694.2 M€ ▲ 31.1% energy deficit Top 3 sectors (% of the total) 20.3 16.4 16.4 Exports Capital goods Food Automotive industry 21.4 15.0 13.2 Geographical distribution (% to the total) Exports Imports Europe 71.7 60.5 EU 65.8 54.8 America 10.7 11 Asia 9.3 20.2 China 2.3 8.5 Africa 6.4 7.9 Other 1.9 0.4
- 44. Energy: higher tradebalance deficit due to higher oil prices 44Source: Círculo de Empresarios based on EIA, Bloomberg, Eurostat and Club Español de la Energía, 2017 and 2018 The increase in oil prices affects trade deficit (▲ imports value) and private consumption Spain → Energy dependence (72.3%) Almost 20 points above EU28 average • ▲ demand in the context of global growth • Supply restrictive policies • Geopolitical conflicts • ▼ supply of shale oil due to natural disasters ▲ oil prices, due to:
- 45. Tourism 45 Source: Círculo deEmpresarios based on INE and Turespaña, 2018 Tourism strength 2017 Main countries of origin Main destinations UK Germany France 18.8 millions 11.9 millions 11.2 millions Catalonia Canary I. Balearic I. 19 millions 14.2 millions 13.8 millions 2017 Record in tourists arrivals 81.8 millions ▲ 8.6% YoY Record in tourism expenditure 86,823 millions € ▲ 12.2% YoY Spain might be in the 2nd place in the international ranking, following France and above USA
- 46. 46Source: Círculo deEmpresarios based on INE and Eurostat, 2018 Spanish business sector January 1st, 2017, 3,282,346 companies in Spain Companies by size % to the total Micro (0-9) Small (10-49) Medium (50-249) Large (> 250) Micro (0-9) Small (10-49) Medium (50-249) Large (> 250) Spain 93.11 5.99 0.78 0.12 94.83 4.44 0.6 0.12 Germany 82.86 14.18 2.45 0.52 82.16 14.83 2.53 0.47 France 94.46 4.59 0.78 0.16 95.26 3.98 0.62 0.14 Italy 94.27 5.11 0.53 0.08 95.2 4.23 0.49 0.08 Portugal 94.93 4.35 0.63 0.09 95.25 4.03 0.62 0.1 United Kingdom 89.29 8.79 1.55 0.37 88.94 9.25 1.48 0.32 2008 2017 (Eurostat forecasts) In 2017 Q4, the creation of companies in Spain fell by 3.8% (21,763 new corporations). In 2017 it decreased by 7.2% (94.998 new business) -15.9 2.2 -15 2.8 23.8 8.3 -19.1 -18.3 1.6 -5.6 -2.8 -1.3 1.2 4.6 -2 4.1 9.5 2017 Q4 Bt region % annual change Total -3,8
- 47. Corporates in Catalonia 47Source:Círculo de Empresarios based on INE, 2017 The creation of corporations in Catalonia decreased in November by 19% compared with the same month of 2016 (vs. -2% at a national level) Companies whichhave moved their headquarters out of Catalonia between Oct. 1st, 2018 and Dec. 31st 2017 3,208 The companies that have moved their headquarters = 40% of its regional GDP Between October the 1st and February 2018, 3,220 companies moved their headquarters out of Catalonia (85% of its market capitalization).
- 48. Interest rates andrisk premium 48Source: Círculo de Empresarios based on Bank of Spain, 2018 The risk premium is again below 90 bp, in minimum levels over the last 3 years ▼ Spanish 10 year yield < 1.40%. Fitch: ▲ Spanish credit rating BBB + (positive) → A- (stable) ▲ German 10 years yield to around 0.73%.
- 49. Financial markets: Ibex35 49Source: Círculo de Empresarios based on BME and Investing, 2018 Ibex 35 closed 2017 with annual gains of 7.4% 2017 annual gains Closing 2017 Gains 2017 IBEX 35 10.043,9 7,40% IBEX 35 WITH DIV 26.939,6 11,25% IBEX 35 MEDIUM CAP 15.060,0 3,97% IBEX 35 SMALL CAP 6.580,2 31,44%
- 50. Spain’s position ininternational rankings N. Zealand Singapore Denmark SPAIN 50 Global Gender Gap Index 2017 (144 countries) Source: WEF, Nov. 2017 ▲ 5 ( vs. 2016) Korea Sweden Singapore SPAIN 1 2 3 29 2018 Innovation Index (50 countries) Source: Bloomberg, 2018 1 2 3 28 Doing Business 2018 (119 countries) Source: World Bank, 2017 ▲4 (vs. 2017) Iceland N. Zealand Israel SPAIN 1 2 3 25 Golden Age Index (34 OECD countries) Source: PwC, 2017 = (vs. 2016) USA Switzerland Canada SPAIN 1 1 3 34 Global Entrepreneurship Index 2018 (137 countries) Source: GEDI, 2017 Iceland Norway Finland SPAIN 1 2 3 24 Estonia N. Zeleand Switzerland SPAIN 1 2 3 28 2017 International Tax Competitiveness Index (35 countries) Source: Tax Foundation, 2017 = (vs. 2016) = (vs. 2017) ▼ 1 (vs. 2017)
- 51. www.circulodeempresarios.org ‘The quarterly report’,is 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 any warning.