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The perception regarding the prospects of the global economic scenario has improved as a result of a relaxation of financial tensions, particularly in Europe, and the last-minute agreement to side-step the fiscal cliff in the US. To sustain the recovery, appropriate policies must be adopted in both the US and the euro area. Without ruling out upside surprises, the risks remain tilted to the downside, although they appear less likely now and should have a smaller impact. Spain: caution due to existing risks. In 2013, the economy should bottom out, paving the way for economic growth in 2014. Therefore it is vital to take advantage of the window of opportunity that has opened up to push through reforms that shore up the improvement in confidence.
Citation preview
Outlook for the Global Economy and for Spain
13 February 2013
Global and Spanish Economic Outlook
Page 2
Key themes
1
2
3
The perception regarding the prospects of the global economic scenario has
improved as a result of a relaxation of financial tensions, particularly in Europe,
and the last-minute agreement to side-step the fiscal cliff in the US.
To sustain the recovery, appropriate policies must be adopted in both the US
and the euro area.
Without ruling out upside surprises, the risks remain tilted to the downside,
although they appear less likely now and should have a smaller impact.
Spain: caution due to existing risks. In 2013, the economy should bottom out,
paving the way for economic growth in 2014.
Therefore it is vital to take advantage of the window of opportunity that has
opened up to push through reforms that shore up the improvement in
confidence.
4
5
Global and Spanish Economic Outlook
Page 3
Section 1
Global economy:
economic outlook improves
Section 2
Spain: will recovery start in 2013?
Contents
Global and Spanish Economic Outlook
Page 4
The ease in financial stress drives an improvement in global economic activity
BBVA financial stress indexSource: BBVA Research
BBVA-GAIN and World TradeSource: BBVA Research based on CPB data
-24,0
-18,0
-12,0
-6,0
0,0
6,0
12,0
-6,0
-5,0
-4,0
-3,0
-2,0
-1,0
0,0
1,0
2,0
3,0
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
World Trade (3m MA) GAIN (right)
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Jan-06
Jun-06
Nov-06
Apr-07
Sep-07
Feb-08
Jul-08
Dec-08
May-09
Oct-09
Mar-10
Aug-10
Jan-11
Jun-11
Nov-11
Apr-12
Sep-12
Feb-13
US Eurozone
The perception of the global economic scenario improves
Global and Spanish Economic Outlook
Page 5
Global economic growth (%)Source: BBVA Research
The perception of the global economic scenario improves
Improved confidence boosts activity Improved confidence boosts activity
The most extreme risk scenarios are less likely now thanks to the response by economic policies
The most extreme risk scenarios are less likely now thanks to the response by economic policies
Progress in governance in Europe and further agreements on the US fiscal deficit are necessary
conditions for recovery
Progress in governance in Europe and further agreements on the US fiscal deficit are necessary
conditions for recovery
2,8
-0,6
5,1
3,9
3,2 3,64,1
-2
-1
0
1
2
3
4
5
6
-2
-1
0
1
2
3
4
5
6
2008 2009 2010 2011 2012 (f) 2013 (f) 2014 (f)
Developed economies Emerging economies
Baseline Feb-13 Baseline Nov-12
Global and Spanish Economic Outlook
Page 6
Brighter prospects for emerging economies
China: GDP growthSource: BBVA Research
Improved prospects for the Chinese economy provide support to the global economy
Improved prospects for the Chinese economy provide support to the global economy
Mid term, consumption must take over as a growth driver in China
Mid term, consumption must take over as a growth driver in China
Investment, backed by stimulus measures, and exports to the rest of Asia and the US are behind
China's renewed growth
Investment, backed by stimulus measures, and exports to the rest of Asia and the US are behind
China's renewed growth
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
% qoq, Seasonally adjusted % yoy
Global and Spanish Economic Outlook
Page 7
The US weathers the impact of fiscal uncertainty
US: economic policy uncertainty indexSource: BBVA Research based on data from PolicyUncertainty.com
Economic policy uncertainty has not prevented financial stress from easing…
Economic policy uncertainty has not prevented financial stress from easing…
Extraordinary monetary expansion counterbalances the potential impact of fiscal uncertainty on economic
performance
Extraordinary monetary expansion counterbalances the potential impact of fiscal uncertainty on economic
performance
…enabling private consumption to continue growing at near pre-crisis levels
…enabling private consumption to continue growing at near pre-crisis levels
-1,500
-,500
,500
1,500
2,500
50
100
150
200
250
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Policy uncertainty (left) Financial Stress (right)
Global and Spanish Economic Outlook
Page 8
Euro area: economic policy uncertainty indexSource: BBVA Research based on data from PolicyUncertainty.com
EMU: lower perception of risk with progress towards a banking union
1. The ECB says it is “ready to do whatever it takes” to preserve the euro
1. The ECB says it is “ready to do whatever it takes” to preserve the euro
3. EU council: decisive and continuous steps towards a banking union
3. EU council: decisive and continuous steps towards a banking union
2. Second Greek bailout: a decisive movement against euro break-up risks
2. Second Greek bailout: a decisive movement against euro break-up risks
-> capital flows back to Europe, and not only to peripheral countries; financial stress eases
-> capital flows back to Europe, and not only to peripheral countries; financial stress eases
What has happened since last summer?
-1,5
-0,5
0,5
1,5
2,5
50
100
150
200
250
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
Incertidumbre de las políticas (izquierda)
Tensiones financieras (derecha)
Policy uncertainty (left)
Financial stress (right)
Global and Spanish Economic Outlook
Page 9
Single regulator and supervisory body in 2014Single regulator and supervisory body in 2014
…without commitments to implement an European deposit guarantee fund
…without commitments to implement an European deposit guarantee fund
Single resolution mechanism and direct recapitalisation to be developed in 2013…Single resolution mechanism and direct recapitalisation to be developed in 2013…
Banking union
Since the December summit, progress towards a fiscal union has been delayed
Since the December summit, progress towards a fiscal union has been delayed
…without debt mutualisation commitments or additional budget controls
…without debt mutualisation commitments or additional budget controls
The "Treaty on Stability" and the "Six pack" appear to be sufficient for now…
The "Treaty on Stability" and the "Six pack" appear to be sufficient for now…
Fiscal union
EMU: lower perception of risk with progress towards a banking union
Global and Spanish Economic Outlook
Page 10
Despite advances, Europe's banking markets remain highly fragmented
Net balance with the Eurosystem (€ Bn)Source: BBVA Research based on Bloomberg data
BBVA composite bank fragmentation indexSource: BBVA Research
* Components: (i) coefficient of variation across countries on the interest rate of loans to businesses
and households (average) (ii) TARGET2 balance (iii) Eurosystem liquidity as a percentage of bank
assets, (iv) interquartile range of 2-year bond yields. To combine the indicators, we normalise and
estimate each based on principal components.
EMU: lower perception of risk with progress towards a banking union
-1200
-1000
-800
-600
-400
-200
0
200
400
600
800
1000
1200
-1200
-1000
-800
-600
-400
-200
0
200
400
600
800
1000
1200
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Periphery
Core
-2
-1
0
1
2
3
4
5
6
Jan-07
Apr-07
Jul-0
7
Oct-07
Jan-08
Apr-08
Jul-0
8
Oct-08
Jan-09
Apr-09
Jul-0
9
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Global and Spanish Economic Outlook
Page 11
USUS Agreements pending: automatic public spending cuts and debt ceiling
Agreements pending: automatic public spending cuts and debt ceiling
EurozoneEurozone
Risk factors to the global scenario
Other global risksOther global risks
Geopolitical pressure, especially in North Africa and the Near East
Geopolitical pressure, especially in North Africa and the Near East
Slowdown in China and other emerging economiesSlowdown in China and
other emerging economies
Achievement of budget deficit targetsAchievement of budget deficit targets
Election uncertaintiesElection uncertainties
Adoption of banking union and Cyprus bailout agreementsAdoption of banking union
and Cyprus bailout agreements
Global and Spanish Economic Outlook
Page 12
Growth looks set to remain uneven
GDP growth (% yoy)Source: BBVA Research
There is still a high dispersion in growth ratesThere is still a high dispersion in growth rates
Euro area: brighter prospects, but recovery will be slow, uneven and vulnerable
Euro area: brighter prospects, but recovery will be slow, uneven and vulnerable
The EAGLEs have proven to be crisis-resistant, reinforcing the "new normal” paradigm
The EAGLEs have proven to be crisis-resistant, reinforcing the "new normal” paradigm
A three-speed world
3,6
4,1
1,8
2,3
0,3
1,3
5,86,1
-2
0
2
4
6
8
-2
0
2
4
6
8
2013 2014 2013 2014 2013 2014 2013 2014
World USA Eurozone Eagles
Feb-13 Nov-12
Global and Spanish Economic Outlook
Page 13
Section 1
Global economy:
economic scenario improves
Section 2
Spain: will recovery start in 2013?
Contents
Global and Spanish Economic Outlook
Page 14
Spain: GDP growth and MICA-BBVA forecasts (% qoq)Source: BBVA Research based on INE data
In spring, 28.6% of analysts polled expected Spanish GDP to contract more than 2.1% in 2012
(50% between 1.4% and 1.8%)
In spring, 28.6% of analysts polled expected Spanish GDP to contract more than 2.1% in 2012
(50% between 1.4% and 1.8%)
Available data point to a negative growth in 1Q13, but not as severe as in 4Q12
Available data point to a negative growth in 1Q13, but not as severe as in 4Q12
Although the pace of decline accelerated in 4Q12, the second half of 2012 beat expectations
Although the pace of decline accelerated in 4Q12, the second half of 2012 beat expectations
2012 topped forecasts in spring
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
CI at 60% CI at 40% CI at 20%
Point estimate Data
Global and Spanish Economic Outlook
Page 15
Fiscal adjustment and economic growthSource: BBVA Research based on IMF data
2012 topped forecasts in spring
Fiscal adjustment has been considerable, but GDP has not responded as expected. Potential reasons:
Fiscal adjustment has been considerable, but GDP has not responded as expected. Potential reasons:
2. Certain measures have been construed as being temporary
2. Certain measures have been construed as being temporary
1. Spending has been cut with a low multiplier at times of financial stress
1. Spending has been cut with a low multiplier at times of financial stress
3. Fiscal adjustment has come alongside compensatory measures (supplier payment plan)
3. Fiscal adjustment has come alongside compensatory measures (supplier payment plan)
DEU
ROM
GRC
CYP
DNK
CHE AUT
FINMLT
SWE
NLD
NOR
POL
BGR
CZEFRAITA
HUN
SVK
ESP
PRT
BEL
SVN
GBR
ISLIRL
-8
-6
-4
-2
0
2
4
6
8
-3 -2 -1 0 1 2 3 4 5 6
GDP growth forecast error
Forecast fiscal consolidation (% of potential GDP)
1. Lower-than-expected multiplier (I)
Global and Spanish Economic Outlook
Page 16
CYP
DNK
CHE AUT
FINMLT
SWE
NLD
NOR
POL
BGR
CZEFRAITA
HUN
SVK
ESP
PRT
BEL
SVN
GBR
ISLIRL
-8
-6
-4
-2
0
2
4
6
8
-3 -2 -1 0 1 2 3 4 5 6
GDP growth forecast error
Forecast fiscal consolidation (% of potential GDP)
Fiscal adjustment and economic growthSource: BBVA Research based on IMF data
2012 topped forecasts in spring
Fiscal adjustment has been considerable, but GDP has not responded as expected. Potential reasons:
Fiscal adjustment has been considerable, but GDP has not responded as expected. Potential reasons:
2. Certain measures have been construed as being temporary
2. Certain measures have been construed as being temporary
1. Spending has been cut with a low multiplier at times of financial stress
1. Spending has been cut with a low multiplier at times of financial stress
1. Lower-than-expected multiplier (II)
3. Fiscal adjustment has come alongside compensatory measures (supplier payment plan)
3. Fiscal adjustment has come alongside compensatory measures (supplier payment plan)
Global and Spanish Economic Outlook
Page 17
2012 topped forecasts in spring
EU: cumulative growth of exports and unit labour costs, 1Q08-3Q12 (%)Source: BBVA Research based on Eurostat data
AUS
BEL
CY
EE
EUEMU
FIN
FRA
DEUIRE
ITA
LUX
MT
NLDPRT
SK
SI
ESP
-15
-10
-5
0
5
10
15
20
25
30
-10 0 10 20
Exports growth
Unit labour costs growth
Exports show increasing diversification of destinations and products
Exports show increasing diversification of destinations and products
The rise in exports has not been accompanied by any increase in imports, unlike at other times in the pastThe rise in exports has not been accompanied by any increase in imports, unlike at other times in the past
Better price competitiveness explains part of this trend, but other determinants are more importantBetter price competitiveness explains part of this trend, but other determinants are more important
2. Higher external demand (I)
Global and Spanish Economic Outlook
Page 18
2012 topped forecasts in spring
Spain: current account and ULCs, 1Q08-3Q12Source: BBVA Research based on Eurostat data
Higher exports and lower imports have produced a sharp improvement in the external imbalance
Higher exports and lower imports have produced a sharp improvement in the external imbalance
Reinforce the feedback factor: improvement in price competitiveness and the other determinants
Reinforce the feedback factor: improvement in price competitiveness and the other determinants
Lower ULCs make Spanish products more competitive vis-à-vis imports
Lower ULCs make Spanish products more competitive vis-à-vis imports
2. Higher external demand (II)
AUS
BEL
CY
EE
EUEMU
FIN
FRA
DEU
IRE
ITA
LUX
MT
NLD
PRTSK
SI
SP
-10
-5
0
5
10
15
-10 0 10 20 30Change in the current account balance over GDP (pp)
Unit labour costs growth (%)
Global and Spanish Economic Outlook
Page 19
2012 topped forecasts in spring
Spain: real wages, employment and GDP(cumulative % change, SWDA data, %)Source: BBVA Research
Labour market reform and the 2nd Agreement on Employment and Collective Bargaining have
prevented further job destruction
Labour market reform and the 2nd Agreement on Employment and Collective Bargaining have
prevented further job destruction
…trends in real wages and other variables are consistent with a more efficient labour market…trends in real wages and other variables are consistent with a more efficient labour market
While more data are needed to identify the factors undermining employment and GDP…
While more data are needed to identify the factors undermining employment and GDP…
3. A more efficient labour market?
-6
-4
-2
0
2
4
Real rem.per
employee
LFS
employment
(swda)
GDP Real rem.per
employee
LFS
employment(swda)
GDP
4Q08-3Q09 1Q12-4Q12
Global and Spanish Economic Outlook
Page 20
2013: the year the economy should bottom out
Spain: domestic demand, exports and imports(4Q2007=100)Source: BBVA Research based on INE data
70
85
100
115
130
Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
Imports
Domestic demand
Exports
Slight improvement in forecast GDP for 2013, with a 1.1% contraction, due to the knock-on effect of
2012
Slight improvement in forecast GDP for 2013, with a 1.1% contraction, due to the knock-on effect of
2012
Significant reduction in the current account deficitSignificant reduction in the current account deficit
Highly mixed performances by exports, domestic demand and imports
-> a dual economy for firms
Highly mixed performances by exports, domestic demand and imports
-> a dual economy for firms
Global and Spanish Economic Outlook
Page 21
2013: the year the economy should bottom out
Regional growth forecasts for 2013 (%)Source: BBVA Research based on INE data
Growth across Spain's regions should also remain uneven
Growth across Spain's regions should also remain uneven
…although adjustment in the northern and central regions of Spain is approaching to the end
…although adjustment in the northern and central regions of Spain is approaching to the end
Differences in regional growth marked by fiscal adjustment and net trade…
Differences in regional growth marked by fiscal adjustment and net trade…
(*) The 45º line indicates the same growth in 2012 and 2013
AND
ARAAST
BAL
CANA
CANT
CYL
CLM
CAT
EXT
GAL
MAD
MUR
NAV
BASCRIO
VAL
SPA
-2,0
-1,6
-1,2
-0,8
-0,4
0,0
-2,8 -2,4 -2,0 -1,6 -1,2 -0,8 -0,4 0,0
GDP growth in 2013 (%)
GDP growth in 2012 (%)
Global and Spanish Economic Outlook
Page 22
2013: the year the economy should bottom out
The unemployment rate should peak during 2013The unemployment rate should peak during 2013
Additional measures and reforms are needed to reduce unemployment faster
Additional measures and reforms are needed to reduce unemployment faster
A smaller active population and improved GDP should allow the unemployment rate to ease slightly in 2014 A smaller active population and improved GDP should allow the unemployment rate to ease slightly in 2014
Spain: unemployment rate (%)Source: BBVA Research
15
17
19
21
23
25
27
29
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
SWDA data Raw data
Global and Spanish Economic Outlook
Page 23
Spain: balance of payments and capital flows (Cumulative 12-month, % of GDP) Source: BBVA Research, based on Bank of Spain data
2014: the start of recovery
A better current account balance reduces the need for external borrowing…
A better current account balance reduces the need for external borrowing…
…and improve foreign perception of the Spanish economy, driving down risk premiums
…and improve foreign perception of the Spanish economy, driving down risk premiums
…which should reduce the dependence on ECB finance…
…which should reduce the dependence on ECB finance…
1. Gradual improvement in foreign confidence in the Spanish economy
34,3
34,6
33,7
29,5
-4
-3
-2
-1
0
1
2
3
4
-40-35-30-25-20-15-10-50510152025303540
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12(e)
Dec-13(e)
Dec-14(e)
Eurosystem
Rest
FDI inflows
Current account (as a residual; includes Errors andOmissions; rhs)
Global and Spanish Economic Outlook
Page 24
Spain and the EMU: GDP growth (% yoy) Source: BBVA Research based on Eurostat and INE data
2014: the start of recovery
2. Higher growth in the EMU
Brighter prospects for the EMU also bode well for Spain:
Brighter prospects for the EMU also bode well for Spain:
2. Higher external demand 2. Higher external demand
1. Higher confidence and lower financial stress1. Higher confidence and lower financial stress
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Spain EMU
Global and Spanish Economic Outlook
Page 25
2014: the start of recovery
Spain: exports and investment in equipment and machinery (2008=100)Source: BBVA Research based on INE data
3. Improvement in private investment
Brighter prospects for the EMU, continued growth in exports...
Brighter prospects for the EMU, continued growth in exports...
…should feed through to a recovery in private sector investment
…should feed through to a recovery in private sector investment
...and reduced financial stress......and reduced financial stress...
60
70
80
90
100
110
120
130
140
Dec-99
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Goods and services exports
Equipment and machinery investment
Global and Spanish Economic Outlook
Page 26
0
5
10
15
20
25
30
35
40
45
50
Started houses Finished houses Housing investment
(% GDP)
2013 (f) 2014 (f)
2014: the start of recovery
4. Smaller negative impact of ongoing adjustments (I):
The supply-side correction in construction should end in 2014
The supply-side correction in construction should end in 2014
The banking sector restructuring will be further along The banking sector restructuring will be further along
Public sector cuts should be less severe than the undertaken in 2012 and the forecast for 2013 Public sector cuts should be less severe than the undertaken in 2012 and the forecast for 2013
Spain: forecasts for the real estate sector(% versus average 2004-2007)Source: BBVA Research based on Works Ministry and INE data
Global and Spanish Economic Outlook
Page 27
Public administrations: decomposition of the budget deficit excluding financial sector aid (% of GDP)Source: BBVA Research, based on MINHAP data
2014: the start of recovery
4. Smaller negative impact of ongoing adjustments (II):
Fiscal consolidation is working: budget cuts in 2012 will surpass 4pp of GDP
Fiscal consolidation is working: budget cuts in 2012 will surpass 4pp of GDP
Overall, there are still major reforms to be undertaken, that would increase the efficiency of the
public administrations
Overall, there are still major reforms to be undertaken, that would increase the efficiency of the
public administrations
2014 will not require as great an effort as in 2013 and 2012
2014 will not require as great an effort as in 2013 and 2012
9.0
2.6
4.3
7.2
2.03.3
5.9
-0.2 1.1
4.6
0
2
4
6
8
10
12
14
Pasivefiscalpolicy
Fiscaleffort
Deficit2012
Pasivefiscalpolicy
Fiscaleffort
Deficit2013
Pasivefiscalpolicy
Fiscaleffort
Deficit2014
Deficit2011
2012 2013 2014
Global and Spanish Economic Outlook
Page 28
Spain: Private sector credit (€Bn, trend)Source: BBVA Research, based on Bank of Spain data
2014: the start of recovery
4. Smaller negative impact of ongoing adjustments (III):
Assessment of the MoU: bank restructuring is well underway
Assessment of the MoU: bank restructuring is well underway
Areas for improvement: (1) lending to SMEs(2) increased data on credit flows
Areas for improvement: (1) lending to SMEs(2) increased data on credit flows
Deleveraging and economic recovery: credit for productive investment and job creation
Deleveraging and economic recovery: credit for productive investment and job creation
100
150
200
250
300
350
Mar-03
Sep-03
Mar-04
Sep-04
Mar-05
Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
New loans Loan repayment
Global and Spanish Economic Outlook
Page 29
A window of opportunity that must be seized
The baseline scenario is highly sensitive to finance conditions in international markets, while numerous risks persist
The baseline scenario is highly sensitive to finance conditions in international markets, while numerous risks persist
Europe should progress towards a more genuine EMU. For this, progress towards the banking union in 2013 and funds to spearhead growth are
crucial.
Europe should progress towards a more genuine EMU. For this, progress towards the banking union in 2013 and funds to spearhead growth are
crucial.
Efforts to achieve permanent improvement of markets and take advantage of it, unlike in the past
Efforts to achieve permanent improvement of markets and take advantage of it, unlike in the past
Spain must extreme efforts with the ongoing adjustments and structural reforms required to boost the competitiveness of its economy
Spain must extreme efforts with the ongoing adjustments and structural reforms required to boost the competitiveness of its economy
Global and Spanish Economic Outlook
Page 30
Key themes
1
2
3
The perception regarding the prospects of the global economic scenario has
improved as a result of a relaxation of financial tensions, particularly in Europe,
and the last-minute agreement to side-step the fiscal cliff in the US.
To sustain the recovery, appropriate policies must be adopted in both the US
and the euro area.
Without ruling upside surprises, the risk of global uncertainty remains tiled to
the downside, although the risks appear less likely now and with a smaller
impact.
Spain: caution due to existing risks. In 2013, the economy should bottom out,
paving the way to begin growing again in 2014.
Therefore it is vital to take advantage or the window of opportunity that has
opened up to push through reforms that shore up the improvement in
confidence.
4
5
Outlook for the Global Economy and for Spain
13 February 2013
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