|
Europe Economic Research |
Spanish GDP contracted 2.8%q/q saar in 4Q12
|
|
|
The Spanish economy contracted 2.8%q/q saar in
4Q12 (or 0.7%q/q, not annualised). The outcome was only a tick
worse than last week's tracking estimate of the Bank of Spain. The
outcome for the whole of 2012 was also broadly in line with
expectation; the Spanish government was expecting a GDP decline of
1.5%oya last year, while the outturn was -1.37%oya, according to
the statistics office. Clearly, the economy was very weak last
year, but it was not weaker than expected.
It is noteworthy, that the intensity of the
recession did not clearly intensify much in 2H12, despite a fiscal
tightening plan that was very backloaded last year. In particular,
GDP was helped in 3Q12 by spending being pulled forward due to the
VAT hike, with payback impacting 4Q12. But, the average contraction
of 2%q/q saar in 2H12 was only slightly larger than in 1H12
(-1.7%q/q saar). This could be because the fiscal tightening was
not being implemented as fully as planned. Or it could be because
Spanish households and firms were already adjusting their spending
in the first half of last year in anticipation of a larger fiscal
drag at year-end. Or a large part of the fiscal drag in 4Q12 led to
a collapse in imports and was thereby "exported" to Spain's trade
partners. The response of imports to domestic shocks is often very
large, but it can also overreact in the first instance, so that
more of the drag could still feed through in subsequent
months.
No details were published with today's report to
help assess the sources of the weakness. Our expectation is that
the economy will contract at a similar pace (2.5%q/q saar) in the
current quarter, then at a slighly slower 1.5%q/q saar pace in 2Q12
before stabilising in the second half of this year. For now, the
business surveys are still at low levels, but it remains
encouraging that the surveys have been nudging higher in recent
months. In this morning's European Commission survey, Spanish
economic sentiment rose another 0.5pts to 88.2, which is almost
5pts above the level in August last year when the ECB announced the
OMT. The Spanish PMI has also nudged a bit higher through to
December.
|
(44-20)
7134-8310
JPMorgan
Chase Bank N.A, London Branch
|
The research
analyst(s) denoted by an "AC" in this report individually
certifies, with respect to each security or issuer that the
research analyst covers in this research, that: (1) all of the
views expressed in this report accurately reflect his or her
personal views about any and all of the subject securities or
issuers; and (2) no part of any of the research analyst's
compensation was, is, or will be directly or indirectly related to
the specific recommendations or views expressed by the research
analyst(s) in this report.
Company-Specific
Disclosures: Important
disclosures, including price charts, are available for compendium
reports and all J.P. Morgan–covered companies by visiting https://mm.jpmorgan.com/disclosures/company,
calling 1-800-477-0406, or e-mailing research.disclosure.inquiries@jpmorgan.com
with your request. J.P. Morgan’s Strategy, Technical, and
Quantitative Research teams may screen companies not covered by
J.P. Morgan. For important disclosures for these companies, please
call 1-800-477-0406 or e-mail research.disclosure.inquiries@jpmorgan.com.
Confidentiality
and Security Notice: This transmission may contain information that
is privileged, confidential, legally privileged, and/or exempt from
disclosure under applicable law. If you are not the intended
recipient, you are hereby notified that any disclosure, copying,
distribution, or use of the information contained herein (including
any reliance thereon) is STRICTLY PROHIBITED. Although this
transmission and any attachments are believed to be free of any
virus or other defect that might affect any computer system into
which it is received and opened, it is the responsibility of the
recipient to ensure that it is virus free and no responsibility is
accepted by JPMorgan Chase & Co., its subsidiaries and
affiliates, as applicable, for any loss or damage arising in any
way from its use. If you received this transmission in error,
please immediately contact the sender and destroy the material in
its entirety, whether in electronic or hard copy format.
|
|