The fall in consumption in December complicates Calviño's forecasts The fall in consumption in December complicates Calviño's forecasts
The Government trusted in the last quarter of the year for the economy to accelerate its growth, driven by household consumption and the arrival of the first allocations of European funds. But as has been happening since 2020, the evolution of the pandemic conditioned the economic data. The omicron variant and the restrictions derived from it led to slower sales in December compared to the previous month. The data on daily domestic sales, published weekly by the Tax Agency (AEAT), show that their growth was 21.6%, 2.7 percentage points less than the previous week.
"The lower expansion in the rate is explained, fundamentally, by the lower dynamism of wholesale trade (15.6% compared to 21.2% previously)," the AEAT points out in the latest published document. A decrease was also observed in retail trade, from 11.8% to 10.4%. In the case of the hotel industry, however, there is an increase and sales go from growing at an interannual rate of 83.7% to 90.7%, according to the same report. However, it adds that "among the activities that are still below its level in 2019, the hotel industry and the manufacture of motor vehicles, trailers and semi-trailers stand out." The data corresponds to the daily sales statistics of the Immediate Information Supply (SII) that offers an evolution of the nearly 61,000 large companies and groups for VAT purposes, as well as other taxpayers with a monthly refund regime.
From CaixaBank Research, they confirm that consumption grew in the fourth quarter of the year compared to the previous one, but indicate that "part of the improvement observed during the last quarter of the year is due to an increase in prices" since their indicator includes the evolution of nominal consumption. According to the National Institute of Statistics, the Consumer Price Index (CPI) grew by 6.5% in December at the interannual rate. Between November and December, prices increased by 1.2%. However, from the bank's analysis division, they explain that "throughout December the sixth wave of infections has begun to make a dent in the sectors most sensitive to restrictions (leisure and restaurants, and tourism)". The data shows that retail spending was below 2019 levels in the last three weeks of December. In the last seven days, payments with cards in leisure and restaurants fell and were 4% lower than before the pandemic.
The arrival of a new variant of coronavirus at the end of November damaged the expectations that some sectors had for the last month of December. The cancellations of Christmas dinners, as well as trips, have harmed the hospitality industry and tourism, two of the sectors hardest hit by the pandemic. In addition, companies had to face more than 240,000 temporary disabilities due to the virus, according to provisional data from the Ministry of Inclusion, Social Security and Migration, until December 23. From BBVA Research, they point out that "the sixth wave of the pandemic boosted health spending and moderated it in social consumption activities, such as leisure, restaurants, sports and travel, especially in the face-to-face channel."
BBVA's studies division reveals that card transactions were 31% higher than a year ago. However, the growth is lower than the 48% registered in November. The slowdown is explained, according to BBVA Research, by the drop in those "made with foreign cards and face-to-face with Spanish cards." They insist that the evolution of the pandemic "undermined" the spending of foreign cards. By sectors, spending on beauty, fashion and travel continued below the 2019 records, both in face-to-face purchases and those made through online channels.
Bad for forecasts
The lower dynamism of consumption in the month of December complicates, even more, that the forecasts of the Ministry of Economic Affairs are met. The department headed by Nadia Calviño maintains that the gross domestic product (GDP) grew by 6.5% in 2021. A figure that has been taken into account for the preparation of this year's budgets and that is the most optimistic among the institutions that make macroeconomic forecasts. While the International Monetary Fund (IMF), the European Commission or the Bank of Spain predicted growth of around 4.5%, Calviño has remained at 6.5%.
The provisional growth figure for the Spanish economy will be known at the end of the month, when the National Statistics Institute (INE) publishes the national accounting figures for the last quarter of the year. For the moment, taking into account the data up to the third quarter, the Government points out in its information on the economic situation that the GDP grew by 4.9% in 2021. In his appearance before investors during Spain Investors Day, the President of the Executive, Pedro Sánchez, stated that "it is evident" that Spain is experiencing year-on-year GDP growth rates in 2021 of over 5%, given the INE data that reflects that growth accelerated to 2.6% in the third quarter and before the estimates of the Independent Authority for Fiscal Responsibility (AIRef), which place the increase for the last quarter at 2.5%.
