The Spanish economy has weakened significantly during the third quarter, maintaining a stagnation trend. Forecasts for year-end growth rates have lowered dramatically, even lower than the worst-case scenario that the government had planned for. And because of falling tax incomes, the public sector's ability to get financing is in jeopardy.
Three analysis groups have teamed up to provide a view on the inauspicious situation. Yesterday, Funcas, BBVA Research and HSBC Global Research indicated that the Spanish economy barely registered a pulse in the third quarter and that its weakness will continue to limit growth capacity for the rest of the year. All institutions lowered their growth predictions.
The Fundación de las Cajas de Ahorros believes that Q3 growth "will barely exist," and according to BBVA Research, it is growing at a rate of 0.1%. HSBC is talking about a "soft recession."
Recent economic progress has prompted analysts from Funcas to downgrade their 2011 forecast, cutting the year-to-year growth rate to 0.7%, two tenths less than the previous rating. For 2012, Funcas estimates a rate of 1% year-to-year, which is a half a point less than before. Domestic demand is estimated at 0.1%, a tenth less than before. There were downgrades in practically all measures, except consumer goods and, surprisingly, construction.
Despite the fact that the construction sector is mired in the crisis, expectations for new contracts improved, particularly for public works, but also for residential building.
