Re: Re: Spain on brink of remarkable recovery…



DB check your PC spell checker, I think it is set at overly optimistic. I am sure you typed ‘flatline’ and it unintentionally put remarkable recovery. đŸ˜€

Even the article said at best Spain is going to be at flatline till 2018 in nominal terms. The unemployment number is still the bank of Spain’s number and they have not released the seasonally adjusted (probably come out this week) because the month before after a Bank of Spain report of an increase of 127K it was actually a seasonal drop of 1K. Lets not hold our breath.

The only good number was export but as said even with it growing it will not over take the drop in domestic consumption occurring as a % of GDP.

Domestic consumption drop is the crux, I do not think it is correctly valued in any model for Spain. The forward effects of Increased house/land tax, IVA etc, I think have been accounted for. The elephant in the room is families with kids between 14-18 years old and/or with parents with long term care needs. Those big medical and school cuts being made by regional governments are putting large burdens on families. I have numerous friends who are trying to work out how to help their newly graduated children because they are going to have to start to pay for the next phase of their child’s life, paid for technical school our external university or extra language classes. These are all non budgeted effects. FYI all the cuts for these agencies are still not in, more kick in next year!