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TRANSCRIPT
BALANCE
THREE YEARS IN GOVERNMENT
CONFIDENCE COMPETITIVENESS GROWTH JOBS WELL-‐BEING
RECOVERY
Over the last three years, the Government of Spain has been implementing an intense agenda of reforms aimed at correcting the economic imbalances and laying the foundations for sustained growth and sustainable well-‐being, while making employment the highest priority for this term of office. With that in mind, steps have been taken on all fundamental targets and a major change for the better has been obtained at all levels:
To guarantee budgetary sustainability, which has enabled recovery from an unprecedented debt crisis and avoided a bailout of the Spanish economy, thereby demonstrating the flexibility. To undertake a far-‐reaching process of bank restructuring aimed at ensuring the solvency of Spanish financial entities and reactivating credit. To overcome economic imbalances and recover from the recession, by fostering competitiveness, overseas activity and entrepreneurship in order to drive growth and speed up job creation. To guarantee the sustainability of well-‐being and to focus efforts on ensuring the effects of the recovery to filter down to the people.
The Government of determination in its reforms and a commitment from the people of Spain have enabled confidence to be restored and the process to recover growth, employment and well-‐being to begin.
2
THREE YEARS OF REFORMS
Spain has returned to economic growth. The Spanish economy has now posted five straight quarters of positive growth (after 20 quarters of negative growth) and grew by 1.6% in the third quarter of this year. Spain is the fastest-‐growing country among the leading Eurozone nations.
Trend in Gross Domestic Product
Source: National Statistics Institute. Accumulated volume. Reference 2008. Calendar-‐adjusted data.
3
-‐0,8%
0,5%
-‐2,5%
1,6%
-‐3,0%
-‐2,5%
-‐2,0%
-‐1,5%
-‐1,0%
-‐0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3
2011 2012 2013 2014
Variación trimestral Variación anual
More reforms: More Growth
Fiscal consolidation: More Confidence
4
Spain has regained confidence in its public accounts. Spain is the country that has carried out the largest fiscal consolidation effort of all members of the G-‐20. Increased credibility has translated into a saving on servicing debt: Spain now pays less for its 10-‐year debt than it paid in 2011 for its six-‐month debt.
Trend in the cost of 10-‐year Public Debt
Source: Bloomberg.
7,63%
1,76%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
ene-‐11 jul-‐11 ene-‐12 jul-‐12 ene-‐13 jul-‐13 ene-‐14 jul-‐14
Restructuring of the financial system: More credit
5
The Spanish financial sector has guaranteed its solvency. Spain is the country with the second-‐best score from the tests by the European Single Supervisory System and the best score in terms of the asset quality assessment. Credit to new SMEs has begun to recover and is growing at 14%.
Annual trend in new credit to companies (<1M )
Source: Bank of Spain. Year-‐on-‐year growth in new loans of less than 1 million euros from credit institutions to non-‐financial companies.
-‐34%
+14%
-‐40%
-‐30%
-‐20%
-‐10%
0%
10%
20%
2006
2007
2008
2009
2010
2011
2012
2013
2014
<1M Tendencia
The economic growth is based on sound foundations thanks to the structural reforms implemented recently. The main imbalances in the Spanish economy have been overcome and an increase in competitiveness has been achieved. Inflation is at its lowest rate in recent history. Spain has posted a negative differential with the Eurozone and Germany for the last 14 consecutive months.
Trend in the inflation differential between Spain and the Eurozone
6
Source: Eurostat. Harmonised consumer price indices (HCPI). Annual price trend.
-‐2%
-‐1%
-‐1%
0%
1%
1%
2%
2%
2004
M01
2004
M04
2004
M07
2004
M10
2005
M01
2005
M04
2005
M07
2005
M10
2006
M01
2006
M04
2006
M07
2006
M10
2007
M01
2007
M04
2007
M07
2007
M10
2008
M01
2008
M04
2008
M07
2008
M10
2009
M01
2009M04
2009
M07
2009
M10
2010
M01
2010
M04
2010
M07
2010
M10
2011
M01
2011
M04
2011
M07
2011
M10
2012
M01
2012
M04
2012
M07
2012
M10
2013
M01
2013
M04
2013
M07
2013
M10
2014M02
2014
M05
2014
M08
2014
M11
Diferencial medio: +0,7%
Diferencial medio: -‐0,6%
Structural reforms: More Competitiveness
More and more companies are undertaking a process of internationalisation because they have gained competitiveness in the global market. Between 2011 and September 2014, the number of companies that export regularly has grown by almost 20%.
Export companies
Source: Ministry of Economic Affairs and Competition. ICEX. Trend in companies that export regularly.
7
35.000
36.000
37.000
38.000
39.000
40.000
41.000
42.000
43.000
44.000
45.000
2009 2010 2011 2012 2013 2014 (Ene.-‐Sep.)
44.564
+19,6%
More competitiveness: More internationalisation
More internationalisation: More exports
8
Spain exports more than most G-‐7 countries (34% of GDP): USA (13%), Japan (16%), France (27%), Italy (30%) and the United Kingdom (31%). Only Germany has a higher export capacity. Spanish exports grew by 8.8% to 2013 and continue to set new records in 2014.
150.000
160.000
170.000
180.000
190.000
200.000
210.000
220.000
230.000
240.000
250.000
2011 2012 2013 2013 (ene.-‐oct.) 2014 (ene.-‐oct.)
+8.8%
+2.1%
Trend in exports
Source: Ministry of Economic Affairs and Competition.
More exports: More business activity
9
The internationalisation of Spanish companies has enabled a reactivation in production and, today, business activity is close to its highest levels before the crisis. Both the industrial and trade PMI are expanding, which helps boost investment.
Source: Ministry of Economic Affairs and Competition. Purchasing Managers Index (PMI).
Trend in business activity
41,1
54,7
36,83
52,7
20
25
30
35
40
45
50
55
60
2007 2008 2009 2010 2011 2012 2013 2014
PMI industria PMI servicios
More business activity: More investment
10
Direct foreign investment shows renewed confidence in Spain. Gross investment grew by over 32% in 2013 and Spain became the ninth country in the world in terms of inbound investment. This trend is being maintained in 2014.
Trend in direct foreign investment (M )
Source: Bank of Spain. 2014: Last 12 months (September to September).
-‐
5.000
10.000
15.000
20.000
25.000
30.000
35.000
2010 2011 2012 2013 2014*
+32.3%
More investment: More companies
11
Investment translates into more companies and more competitiveness. In the last 12 months, the number of new companies has grown by 71,500. Net creation of companies rose by over 4% when compared with a year ago and by almost 10% on 2011.
Trend in new companies
50.000
55.000
60.000
65.000
70.000
75.000
2010 2011 2012 2013 Últimos 12 meses
+9,9%
Source: Spanish National Statistics Institute (INE). Mercantile companies.
In the second and third quarters of this year, 550,000 jobs were created in Spain in Labour Force Survey (EPA) terms. Furthermore, the number of National Insurance contributors has grown by 2.5% in the last 12 months, i.e. by over 400,000 people. The figure for November is the best since records began and 2014 will close as the best year for employment since the start of the crisis.
Trend in National Insurance contributors
12
-‐4,57%
2,47%
-‐5%
-‐4%
-‐3%
-‐2%
-‐1%
0%
1%
2%
3%
Source: Ministry of Employment and Social Security.
More companies: More employment
Improvements in the economic situation filter down to the labour market faster. The labour reform has produced a paradigm shift in unemployment, which at certain moments during the crisis climbed to 83% year-‐on-‐year. Today, unemployment is falling at a rate of 8.7%. Last year, unemployment fell by over 500,000.
Trend in unemployment
Source: National Statistics Institute. Year-‐on-‐year rates of change.
13
More employment: Less unemployment
-‐10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3
2007 2008 2009 2010 2011 2012 2013 2014
83,4%
18,3%
-‐8,7%
Less unemployment: More well-‐being
14
The job recovery is starting to be reflected in well-‐being for households. Household consumption has regained strength and is growing at pre-‐crisis levels. Private consumption rose in the third quarter of the year by 2.7% year-‐on-‐year, the best figure in six years.
Source: National Statistics Institute. Accumulated volume index.
Trend in household consumption
-‐3,8%
2,7%
-‐5%
-‐4%
-‐3%
-‐2%
-‐1%
0%
1%
2%
3%
4%
T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4
2010 2011 2012 2013 2014
Variación trimestral Variación anual
More consumption: More well-‐being
15
After 69 straight months of falling retail trade index figures, this index began to grow slightly in September. New vehicle registrations to November 2014 grew by 18% and now exceed those registered in 2013.
New vehicle registrations
Source: ANFAC and the Directorate-‐General of Traffic.
500.000
550.000
600.000
650.000
700.000
750.000
800.000
850.000
900.000
950.000
1.000.000
2009 2010 2011 2012 2013 2013(nov.)
2014(nov.)
722.689
781.868
+18,1%
More investment: More well-‐being
16
The general public is regaining confidence in the future and property purchases are picking up again. After seven years of negative figures, new loans for the purchase of property will grow in 2014 and post growth in October of almost 20%.
Trend in new loans for property purchase
Source: Bank of Spain.
-‐50%
-‐40%
-‐30%
-‐20%
-‐10%
0%
10%
20%
2006 2007 2008 2009 2010 2011 2012 2013 2014 (oct.)
10,3%
-‐14,7%
-‐40,1%
-‐16,0%
-‐5,0%
-‐46,0%
-‐13,9%
-‐32,3%
19,4%
More pensions: More well-‐being
17
A guarantee has been made to ensure pensions are not frozen or lowered. An increase of 0.25% was approved, which, within a context of falling prices (-‐0.4% in the CPI in November), increases the purchasing power of pensioners.
Average pension in real terms
Source: Ministry of Employment and Social Security. Constant euros in 2014.
600
650
700
750
800
850
900
950
1.000
1.050
2010 2011 2012 2013 2014
959
1.006
Less taxes: More well-‐being
18
Efforts by the Government of Spain are focused on ensuring that the effects of the recovery quickly filter down to all households. The Tax Reform represents a general tax decrease (12.5%), but most benefits those people on the lowest incomes. It will give Personal Income Tax and Corporate Income Tax payers 9 billion euros more disposable income over two years.
Impact of the Tax Reform (M )
Source: Ministry of the Treasury and Public Administration Services.
Impact of the tax reform
(M ) 2015 2016 Total
Personal Income Tax -‐3,366 -‐2,615 -‐5,981
IS -‐437 -‐2,641 -‐3,078
TOTAL -‐3,803 -‐5,256 -‐9,059
