Spain: Consumer confidence falls on the back of political paralysis – ING

By FXStreet Geoffrey Minne, Research Analyst at ING, suggests that having reached an all-time high in December, Spanish consumer confidence declined both in January and February.

Key Quotes

“It is likely that the political uncertainty has started to come into play and weigh on households’ confidence.

According to the last surveys of the Centre for Sociological Studies (CIS), the consumer confidence index decreased by 8.3 points MoM in January and 3.9 points in February to reach 95.2. The drop was mainly driven by the sub-indicator pertaining to the expectations of Spanish consumers that went from 119.6 in December to 102.7 in February. An explanation is that the Spanish consumer tends to be increasingly less optimistic about the evolution of the labour market. In December, 42.5% of the respondents thought that they would face better job prospects in the next six months, but this has since fallen back to only 32.2%. The slump is not limited to consumers as business confidence was also down in January. Knowing that about 0.7ppt of the 0.8% GDP growth in Q4 2015 can be attributed to consumption and private investment, the strong growth seen last year is increasingly looking to be at risk in Spain.

The political paralysis seems to be …read more

Source:: FX Street