Not just a heat wave. Another one of economic optimism is also sweeping through Spain this summer, at least when compared to the climate of restlessness among its European neighbors. The Spaniards are the ones who show the best expectations regarding variables such as future income, the evolution of housing prices and economic growth among the large economies of the euro zone. The only thing in which they show more stinginess is in consumption, according to the latest survey of Consumer Expectations of the ECB, with data from June.
This study is carried out periodically by the ECB among 14,000 adults in six countries of the euro zone, which are Germany, France, Italy, Spain, the Netherlands and Belgium. It is not an empty exercise, since expectations play an important role in the economy, in which self-fulfilling prophecies abound. The ECB itself warns that the results of the survey are used in its analysis of monetary policy, in which it is key to detect when rate hikes can lead to a recession.
Spaniards expect their income to rise by 3% in the next twelve months, compared to the 1.2% European average. Their optimism is growing, while that of the Netherlands falls back to 1.5% and that of Germany rises slightly to 1.2%, while the citizens of Italy, Belgium and the Netherlands do not believe that they will raise more than 1 % of your income in the next year.
This perception may be partly due to the salary review agreement reached between employers and unions in Spain in May, somewhat later than in other European countries. Social agents recommend increases of 4% in 2023 and 3% in both 2024 and 2025. Pensions rose strongly last year, 8%.
On the other hand, the Spanish do not expect to raise their expenses as much as their neighbors. On average, the increase among the large economies of the euro zone in the next twelve months will be 3.4%, and it will be more pronounced among those under 24 and those over 55. Belgians will spend 4.2% more and the French, 2.5% more. In Spain, the forecast is to increase consumption by 3.3%.
These percentages with the perception of Spanish households are actually above the consumption forecasts of different analysts and study centers. BBVA Research calculates that household spending will increase this year by 0.6%, compared to the 0% forecast by AFI, 0.6% by CaixaBank Research or 0.1% by Funcas.
On the other hand, the Spaniards make economic growth forecasts that are much lower than those of analysts, although they are also much more optimistic than in the rest of the euro zone, where the average consists of a fall in GDP of 0.6%.
In Spain, respondents forecast that the national economy will grow by 0.3% in the next year, while Italians expect an increase of 0.1%. The rest of the neighbors forecast declines in GDP ranging from 0.4% in Germany to 0.9% in France.
The perception of the Spanish citizen is very different from the growth forecast of the CEOE for this year, of 2%, or of Mapfre Economics, which places it at 2.2%. The Government thinks that GDP will increase by 2.1% in 2023, compared to 2.3% of the Bank of Spain.
Although for many people the rise in house prices is an indication of economic difficulty, economists see in this perception another sign of optimism. Spaniards believe that, despite the rise in interest rates, housing will become more expensive by 3.9% in the next twelve months, compared to the 1.4% forecast in Germany or 0.3% in the Netherlands.
The ECB also asks about inflation, which is what obsesses him the most. Europeans have the perception that, in the last twelve months, prices have risen by 8%, while they forecast that, in the following months, the rise will moderate to 3.4%. It is still a high level for the ECB, whose mission is to keep price increases at maximums of 2%.
