Presentation "Consumption Outlook Spain. Second Half 2014"

Segundo semestre 2014

Sevilla, 10 de diciembre de 2014

Situación Consumo

Consumption Outlook 2H14 / 10 December 2014

Page 2

The global economy is growing, but more slowly than anticipated. Europe faces major challenges

The recovery in Spain continues at the pace expected, despite the stagnation in Europe. Reforms are still needed

Private consumption retains its momentum thanks to better fundamentals, more lending, less uncertainty and the prolongation of the PIVE programme …

… but the margin for improvement is running out: households are still leveraged, the savings rate is at rock bottom and the stimuli are transitory

The momentum of spending on durables relies on their greater income elasticity and on the fact that most consumer items are complementary goods

E-commerce is still used relatively little in Spain. IT literacy, income level, internet banking use and corporate digitalisation are all key

1

2

3

4

5

6

Key takeaways


Page 3

Section 1

Global recovery, slow and with risks to the downside

Section 2

Spain is growing and creating employment in line with expectations

Section 3

The recovery of private consumption continues, but the scope for improvement is running out

Section 4

The momentum of spending on durables relies on their greater income-elasticity and on the fact that most consumer items are complementary goods

Section 5

E-commerce and consumer habits in Spanish households

Contents


Page 4

Both the financial and the activity indicators

are sending signals consistent with a

favourable growth scenario …

… despite the emergence of geopolitical risk

factors …

… which, for the moment, have not altered the

expectations for world growth

Section 1

Despite the emergence of geopolitical risk events …

BBVA Research financial tensions index Source: BBVA Research

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Dec-1

1

Ma

r-1

2

Jun-1

2

Sep

-12

Dec-1

2

Ma

r-1

3

Jun-1

3

Sep

-13

Dec-1

3

Ma

r-1

4

Jun-1

4

Sep

-14

Developed Emerging (rhs)


Page 5

Global industrial activity continued growing

until May at around 3.4% YoY, from 3.0% at

the end of 2013

World trade recovered from its intense and

widespread downward correction, suffered in

1Q14 (e.g. the US)

The most recent data point to a moderate

acceleration in recovery in the next few

months

Section 1

… the most likely scenario is one of growth

Global growth based on BBVA-GAIN (% QoQ) Source: BBVA Research

0.0

0.2

0.4

0.6

0.8

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

Forecasts


Page 6

Section 1

The global economy continues to grow, but less than

expected in some countries

Source: BBVA Research 2014

USA Spain

Eurozone

Mexico

Brazil

China

LatAm EAGLES

2.0%

2.5%

1.3%

0.8%

7.2%

4.9%

0.2%

0.9%

Global 3.2%

LatAm 7: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Venezuela

EAGLES: China, India, Indonesia, Russia, Brazil, Turkey and Mexico


Source: BBVA Research 2015

USA Spain

Eurozone

Mexico

Brazil

LatAm

2.5%

3.5%

2.0%

1.3%

1.3%

1.8%

Global 3.7%

LatAm 7: Argentina, Brazil, Chile, Colombia, Mexico, Peru, Venezuela

EAGLES: China, India, Indonesia, Russia, Brazil, Turkey and Mexico

China 7.0%

EAGLES 5.2%

Page 7

Section 1

The global economy continues to grow, but less than

expected in some countries


Page 8

On a historical comparison, the rate of exit

from the recession looks sluggish

Deleveraging in the private sector is slow and

total debt (public + private) remains high

The adjustment of the balance between agents, still pending, could be an obstacle to recovery in

the medium term

Section 1

The recovery is moderate

Per capita income: comparison of different crises and their respective recoveries Source: BBVA Research


Page 9

Section 1


Section 2


Section 3


Section 4


Section 5


Contents


Spain: real GDP growth and MICA-BBVA forecasts Source: BBVA Research

Page 10

Section 2

Spain is growing and creating employment in line with

expectations…

The Spanish economy has enjoyed five

consecutive quarters of growth (0.5% in 3Q14)

and four of job creation …

… thanks to the improvement in domestic

demand, especially private, and despite the

fall-back in net exports

4Q14 indicators suggest growth of at least

0.5%

1.3% in 2014; 2.0% in 2015

-1.0

-0.5

0.0

0.5

1.0

-1.0

-0.5

0.0

0.5

1.0

Jun-0

9S

ep

-09

Dec-0

9M

ar-

10

Jun-1

0S

ep

-10

Dec-1

0M

ar-

11

Jun-1

1S

ep

-11

Dec-1

1M

ar-

12

Jun-1

2S

ep

-12

Dec-1

2M

ar-

13

Jun-1

3S

ep

-13

Dec-1

3M

ar-

14

Jun-1

4S

ep

-14

Dec-1

4 (

f)

CI at 60% CI at 40% CI at 20% GDP (%QoQ)


Spain: Estimated effect on GDP of a 1%

reduction in EMU economic growth (1980-2013.pp) Source: BBVA Research

Page 11

Section 2

… despite the weakness in the recovery of the EMU

In the past, a 1% fall in GDP in the EMU has

passed through almost entirely to Spanish

GDP

The trade channel (exports) will be the main

transmitter, but there may be others

(investment, financial, etc.)

But on this occasion, the impact may be lower

AND ARA

ASTBAL

CAN

CANT

CAT CLM

CYL

EXT

GAL

MAD

MUR

NAV

PVA

RIO

VAL

ESP

-1.4

-1.2

-1.0

-0.8

-0.6

-0.4

0 20 40 60 80

Impact

on G

DP

(pp)

Share of regional exports to the Eurozone (% total exports)


Spanish exports and GDP of the EMU (1980-2013.

% growth YoY) Source: BBVA Research based on INE and Eurostat

Page 12

Section 2

Factors that will underpin growth A. Greater diversification and competitiveness of exports

Exports continue to grow (3.5% QoQ in 3Q14)

despite the apathy in the EMU …

… as they did in the past as well

Greater diversification, gains in

competitiveness and increased investment in

recent quarters will support exports -2

0

2

4

6

8

10

12

14

16

18

-2 -1 0 1 2 3 4 5

EMU GDP growth (% YoY)

Spain

's e

xport

gro

wth

(%

YoY

)

2012

2013

1993


Page 13

Spain: Estimated effect on GDP of a 10%

depreciation in the euro/dollar exchange rate (1980-2013. pp) Source: BBVA Research

Section 2

Factors that will underpin growth

B. Looser monetary policy: a depreciating euro

Another factor which will improve

competitiveness will be a more depreciated

euro

We forecast an exchange rate of around USDEUR 1.20 in 2015; 10% below the 2014

average …

… which will strengthen the increase in

exports and the substitution of imports

PVA GAL

CANT CAT

NAV

CLMMUR

ESP

RIO

CAN

VAL

ARAMADAND

CYL

BAL

AST

EXT

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0 20 40 60 80 100

Impact

on G

DP

(pp)

Trade openness 2013 (% of GDP)


Page 14

Section 2

Factors which will underpin growth

B. Looser monetary policy: lower rates

Spain: estimated impact on GDP of a 100bp fall in the banking credit spread as a result of the TLTRO (pp) Source: BBVA Research

The ECB’s actions are designed to reduce the cost of bank lending, dependent on an

increase in credit

In Spain, lower rates may contribute around 0.5pp to GDP growth by in 2015 …

… although there is considerable uncertainty here

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

2014 2015 2016 2017 2018 2019


Page 15

Section 2

Factors which will underpin growth C. The cyclical improvement means that less fiscal tightening is required

Spain: discretional fiscal measures (pp of GDP) Source: BBVA Research

Between 2011 and 2013, reducing the public

deficit from 9.2 to 6.3% of GDP required

measures of over 7% of GDP because of the

recession

In 2014 there has been an improvement in the cycle and more responsiveness to the

recovery on the part of expenditure and revenues

This will give the public administration

departments the scope to implement

expansionary policies and, even so, meet their

targets

2.1

5.4

2.1

0.0

-0.2

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2011 2012 2013 2014 (f) 2015(f)


Leading variables

.

Lagging variables

Page 16

Section 2

Factors which will underpin growth

D. Progress in the reduction of imbalances

Real interest rate

Real net financial wealth

Building permits

Prices

Residential investment

External demand

-3.3pp since 3Q12

+46.0% since 2Q12

+15.5% since 2Q13

Stabilised in 2Q14

Stabilised at the end of 2Q14

+72% since 1Q10

=

=


Page 17

Section 2

Forecast by regions

Growth forecasts by regions (%) Source: BBVA Research

We hold to our forecasts of heterogeneous

growth by region

Differing levels of exposure of regions to external demand …

… and the progress in the process of fiscal consolidation continue to be the key factors

accounting for growth differentials

After contracting 1.5% in 2013, the Andalusian

economy is returning to growth in 2014 and

will accelerate in 2015

AND

ARA

AST

BAL

CAN

CNT

CYLCLM

CAT

EXT

GAL

MAD

MUR

NAV

PVAS

RIO

VAL ESP

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2

GD

P g

row

th 2

015

GDP growth 2014


Page 18

Section 2

Bias to the upside: lower oil prices

Spain: estimated impact on GDP and the CPI of a 20% fall in oil prices (pp) Source: BBVA Research

Reduced transport costs would make exports

more competitive

Furthermore, as the price reduction is passed through to households, private consumption

could benefit

It will be critical to diagnose the nature of the

fall: if it is due to increased supply and is

permanent, the impact could be significant -2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2014 2015 2014 2015

GDP (%YoY) CPI (%YoY)

Supply shock Global demand shock


Page 19

Employment changes (Level of employment at the beginning of each crisis = 100 ) Source: BBVA Research based on Andrés and Doménech (2012)

GDP growth target: 2.5% to 2025

Section 2

The need to dig deeper with reforms

Urgent short-term challenge: reduce the unemployment rate

But the travails of the job market go deeper: collective bargaining, two-tier system and

employment policies

More employment, and more productive

80

85

90

95

100

105

Peak 2 4 6 8 10 12 14 16 18years

Em

plo

ym

ent leve

l at

the b

egin

nin

g o

f th

ecrisis

= 1

00

Spain , 2007-25

EU8, 2007-11USA, 2007-14

USA, 1929-40


Page 20

Section 1


Section 2

Spain is growing and creating employment in line with expectations Section 3


Section 4


Section 5


Contents


Page 21

What accounts for the growth in consumption?

Spain: data and forecasts in real time of household consumption Source: BBVA Research based on INE

Disposable income: changing cycle in the job market and tax regime

Wealth: Rise in financial wealth

Consumer appetite: Less uncertainty

Debt capacity:

Households → increase in lending

Public sector → PIVE programme

Section 3

The recovery of private consumption continues

-6

-4

-2

0

2

4

-3

-2

-1

0

1

2

Ma

r-0

8

Dec-0

8

Sep

-09

Jun-1

0

Ma

r-1

1

Dec-1

1

Sep

-12

Jun-1

3

Ma

r-1

4

Dec-1

4(e

)

Consumption (% QoQ, lhs) Consumption (% YoY, rhs)

MICC-BBVA (% YoY, rhs)


Page 22

Spain: employment and wage income (3Q13 = 100) Source: BBVA Research based on INE, MEYSS and Ministry for the Economy

Section 3

The recovery in private consumption continues

1. Changing cycle in the job market and tax regime

The reform of the labour market has helped to accelerate job creation

Occupation levels have gone up since 4Q13 …

… and will continue to do so during 2015 (1.0% in 2014; 1.8% in 2015)

The tax reform will cut 2.2pp off effective average rates to 2016 → this will contribute to

raising disposable income

95

100

105

110

115

120

125

Ma

r-0

8

Dec-0

8

Sep

-09

Jun-1

0

Ma

r-1

1

Dec-1

1

Sep

-12

Jun-1

3

Ma

r-1

4

Dec-1

4(

e)

Indicator of real wage income

Social Security afilliation

LFS employment

3Q13 = 100


Page 23

Spain: real net financial wealth (Deflated with the consumption deflator, swda figures, %) Source: BBVA Research based on Bank of Spain

Section 3


2. Increase in net financial wealth

Reduction of financial tensions → revaluation of stock market prices and fall in lending costs

→ ↑ financial wealth

BBVA Research: ↑1% of real net financial wealth → ↑ aggregate private consumption by

0.2% in the next four quarters

Real net financial wealth : ↑46.0% since 2Q12 → ↑7.5pp of growth in consumption to 2Q15 -15

-10

-5

0

5

10

15

0

200

400

600

800

1,000

1,200

Ma

r-0

8Jun-0

8S

ep

-08

Dec-0

8M

ar-

09

Jun-0

9S

ep

-09

Dec-0

9M

ar-

10

Jun-1

0S

ep

-10

Dec-1

0M

ar-

11

Jun-1

1S

ep

-11

Dec-1

1M

ar-

12

Jun-1

2S

ep

-12

Dec-1

2M

ar-

13

Jun-1

3S

ep

-13

Dec-1

3M

ar-

14

Jun-1

4

Eur mm (lhs) % QoQ (rhs)

2Q12-2Q14: ∆46.0%


Page 24

Spain: household perception of the economic situation (swda data, quarterly averages, balance of replies) Source: BBVA Research based on CE

Section 3


3. Less uncertainty

Household perceptions of the Spanish economy’s prospects are back to where they

were in 2000

… and in terms of their own financial situation, at their highest level for the last ten years

The reduction in uncertainty is an incentive to consumption, to the detriment of saving

Permanent ↑ of 10 points in confidence, ↑1.2 points in consumption in the next three years

-6

-4

-2

0

2

4

6

-50

-40

-30

-20

-10

0

10

ma

r-0

5

sep-0

5

ma

r-0

6

sep-0

6

ma

r-0

7

sep-0

7

ma

r-0

8

sep-0

8

ma

r-0

9

sep-0

9

ma

r-1

0

sep-1

0

ma

r-1

1

sep-1

1

ma

r-1

2

sep-1

2

ma

r-1

3

sep-1

3

ma

r-1

4

sep-1

4

Expectations on the household's financial situation (12 months)

Expectations on the overall economic situation (12 months)

Household's consumption (% YoY, rhs)

+23,5 puntos

+44,0 puntos


Page 25

Spain: new consumer financing operations (% YoY of the three-month centred moving average Source: BBVA Research based on Bank of Spain

Section 3


4. More financing

As the BBVA BTS suggested, new consumer credit operations have grown during 2014 …

… and have done so at double-digit rates, boosted by the increase in medium- and long-

term lending …

… in a context of deleveraging of the outstanding balance and still-high rates

Consumer credit /GDP: Spain = EMU = 5.7%

-80

-60

-40

-20

0

20

40

60

80

Ja

n 1

1

Apr

11

Ju

l 11

Oct 1

1

Ja

n 1

2

Apr

12

Ju

l 12

Oct 1

2

Ja

n 1

3

Apr

13

Ju

l 13

Oct 1

3

Ja

n 1

4

Apr

14

Ju

l 14

Oct 1

4

Total < 1 year 1-5 years > 5 years


Page 26

Spain: effect of the PIVE on private consumption (pp) Source: BBVA Research

Section 3


5. Fiscal stimuli: PIVE

The PIVE has limited the negative repercussion which the rise in VAT in Sept

2012 had on household spending

Effect on private consumption around 1 percentage point since 4Q12

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14

Over the quarterly growth rate Cumulative effect

PIVE comes into effect: Oct-12


Page 27

Spain: private consumption gap (difference between observed spending and that explained by the fundamentals, % of spending explained by fundamentals) Source: BBVA Research

Section 3

The recovery in private consumption continues,

but the scope for improvement is running out

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2008 2009 2010 2011 2012 2013 2014 (f) 2015 (f)

Although consumption will continue to grow in the short term …

… several factors will limit its momentum in

the medium-term:

1. Levels of household debt (74% GDP)

2. Savings rate at rock bottom (9% GDI)

3. The PIVE has to end at some point

Households have consumed more than can be justified by their fundamentals →

Correction likely if their expectations are not met


Page 28

Section 1


Section 2


Section 3

The recovery of private consumption continues, but the scope for improvement is running out Section 4


Section 5


Contents


Page 29

Availability of consumer goods (1Q13 = 100) Source: BBVA Research using Ministry of Economy figures

Section 4

Durable goods, in the lead

During the crisis, consumption diminished by more than 10% in real terms, back to 2004

levels

But not all products suffered equally. Durable goods had the hardest time (↓2/3)

Since the beginning of 2013, durables have led the household spending recovery. Why?

Box 2

90

100

110

120

130

140

150

Ma

r-1

1

Ju

n-1

1

Se

p-1

1

De

c-1

1

Ma

r-1

2

Ju

n-1

2

Se

p-1

2

De

c-1

2

Ma

r-1

3

Ju

n-1

3

Se

p-1

3

De

c-1

3

Ma

r-1

4

Ju

n-1

4

Se

p-1

4

De

c-1

4 (

f)

Consumer goods Food

Durables Remaining non-durables

1Q13 = 100


Page 30

Estimated spending-elasticity of each group of products (%) Source: BBVA Research based on INE

Section 4

Durables, in the lead

The consumption of certain durables is growing more than households’ purchasing

power → luxury goods

Transport is more sensitive to changes in income. White and brown goods have become

necessities

The majority of products are complementary goods:

e.g. ↓ of vehicle prices not only increases demand for them, but also for household

appliances and brown goods, furniture and leisure

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Non-durableand housing

White andbrown

goods

Leisure andrest

Furniture Transport

Each group's spending elasticity (CI at 80%) Unit elasticity


Page 31

Spain: car registrations by channel (swda data, three-month moving average, Jan-13 = 100) Source: BBVA Research based on ANFAC and GANVAM

Section 4

Durables, in the lead Cars: still up, but less vigour

PIVE-6: more modest results Individuals: 0.7% average from July to Nov, compared to 3.0% between Feb and June

during PIVE-5

Professional channel: diverging trends ↑9% companies ; ↓7% rental firms in 2H14

Less relative demand for 2nd hand vehicles: The 2nd hand/new vehicle ratio fell to 1.9 in

Sept 14 (2.1 to Sept 13)

The relative price of cars is rising: ↑1.2% in 2H14

80

90

100

110

120

130

140

150

160

Jan-1

3

Fe

b-1

3

Ma

r-1

3

Apr-

13

Ma

y-13

Jun-1

3

Jul-1

3

Aug

-13

Sep

-13

Oct-

13

Nov-1

3

Dec-1

3

Jan-1

4

Fe

b-1

4

Ma

r-1

4

Apr-

14

Ma

y-14

Jun-1

4

Jul-1

4

Aug

-14

Sep

-14

Oct-

14

Nov-1

4

Total Individuals Firms Rental companies

PIVE-5 PIVE-6

Professional channel: diverging trends ↑9% companies ; ↓7% rental firms in 2H14

Less relative demand for second-hand vehicles. The second-hand/new vehicle ratio

fell to 1.9 in Sept 14 (2.1 to Sept 13)

The relative price of cars is rising: ↑1.2% in 2H14


Page 32

Spain: forecast of vehicle registrations Source: BBVA Research

Section 4

Durables, in the lead Cars: the extension of the PIVE heralds more demand

2014: 860,000 units (around 19% more than in 2013)

2015: will depend on how long the PIVE is extended

↑6% if current conditions are retained for the whole year (~910,000)

The improvement in determinants (per capita income, unemployment, relative prices and

interest rates) will help -40

-30

-20

-10

0

10

20

0

200

400

600

800

1000

1200

2008 2009 2010 2011 2012 2013 2014 2015 L/P

(% Y

oY

)

'000 o

f cars

Data ForecastData % YoY (rhs) Forecast % YoY (rhs)


Page 33

Spain: registrations of motorcycles and estimated fleet (swda figures, 1Q13 = 100) Source: BBVA Research based on Bank of Spain and Anesdor

Section 4

Durables, in the lead Motorcycles: with a tail wind

An exceptional second half (↑30%) …

… accounts for the rise in motorcycle registrations in 2014 after six years of falls:

115,000 units (~20%)

Causes: better expectations, increase in lending and ageing fleet

2015: 140,000 registrations

0

50

100

150

200

250

300

Ma

r-0

8

Dec-0

8

Sep

-09

Jun-1

0

Ma

r-1

1

Dec-1

1

Sep

-12

Jun-1

3

Ma

r-1

4

Dec-1

4 (

f)

Registrations Estimated fleet

Plan Moto-E


Page 34

Spain: turnover in the furniture sector and housing investment (swda figures. 4Q13 = 100) Source: BBVA Research based on INE

Section 4

Durables, in the lead Furniture: tracking the awakening in the real estate sector

Turnover has risen for three quarters in a row (5.3% since 4Q13)

The first increase in housing investment since 2H07 boosted activity in the furniture sector

BBVA Research estimates: ↑1% in nominal housing investment →

↑0.7% in aggregate turnover 75

100

125

150

175

200

225

250

Ma

r-0

8

Dec-0

8

Sep

-09

Jun-1

0

Ma

r-1

1

Dec-1

1

Sep

-12

Jun-1

3

Ma

r-1

4

Dec-1

4 (

f)

Furniture Housing investment

4Q13 = 100


Page 35

Spain: household appliance sales by household (% growth YoY of number of units) Source: BBVA Research based on ANFEL

Section 4

Durables, in the lead White goods: the recovery digs in

2014 will be the first positive year since 2006 (↓40% in turnover to 2013)

Sales Jan-Nov 2014: 11.9% YoY (-5.6% in 2013)

Prices trending downwards → more modest increase in turnover (7.5%)

All the household appliance categories showed positive YoY growth, most of them in double

digits

-40

-20

0

20

40

60Refrigerators

Freezers

Washing Machines

Driers

Dishwashers

Cookers

Ovens

Worktops

Extractor hoods

Total

2013 Jan-Oct 2013 Jan-Oct 2014


Page 36

Spain: household penetration rate of brown goods (% of households) Source: BBVA Research based on INE

Section 4

Durables, in the lead Brown goods: more ICT, fewer consumer electronics

While demand for ICT equipment returned to growth in 3Q14 …

… there was less call for consumer electronics after the 1H14 uptick in sales driven by the

football World Cup

The fall in relative prices is contributing to raising the presence of ICT in households, but

not so with consumer electronics

0 20 40 60 80 100

E-book reader (*)

Video

MP3 or MP4

Sound system

DVD

Computer (inc. tablets)

Radio

Landline telephone

Mobile telephone

Television

2014 2013 2008


Page 37

Section 1


Section 2


Section 3


Section 4

The momentum of spending on durables relies on their greater income-elasticity and on the fact that most consumer items are complementary goods Section 5


Contents


Page 38

Spain vs EU15: access to internet and e-commerce (households with internet access and on-line buyers in the last three months, %) Source: BBVA Research based on Eurostat

Section 5

E-commerce and consumption habits

ICT usage and widespread access to internet by households has helped e-commerce to

make progress in Spain (×5 since 2004; ×2 since 2008 )

But there is a lot of scope for improvement: only 1 in 4 people has recently made an

internet purchase in Spain, compared to 1 in every 2 in the EU15

What makes people buy over the internet? Why is e-commerce penetration still so low?

Box 1

0

10

20

30

40

50

60

70

80

90

2004 2008 2009 2010 2011 2012 2013

Spain: Internet access EU15: Internet access

Spain: Internet purchases EU15: internet purchases


Page 39

Determinants of the likelihood of buying on internet. Selected variables (%) (Reference: Woman, primary education, not employed, medium-low income band, household with five or more members) Source: BBVA Research Limited incidence of e-commerce :

• Individual characteristics: low income, inadequate ICT training, more people in the household…

• Modest economies of scale

• Technological failings and lower internet banking use

Reluctance of Spanish companies to exploit the possibilities of e-commerce. ←

Consumption Outlook 2H13

Reticence in households to buying on-line: 1 in 3 computer users says they have low or nil

trust of internet

Section 5

E-commerce and consumption habits

0 5 10 15 20 25 30 35

Internet banking

Internet at home

Assiduity of internt use

4-person household

3-person household

2-person household

One-person household

High income band

Medium-high income band

Employee

Secondary education

Tertiary education

Male

Population ≥500.000


Page 40

The global economy is growing, but more slowly than anticipated. Europe faces major challenges

The recovery in Spain continues at the pace expected, despite the stagnation in Europe. Reforms are still needed

Private consumption retains its momentum thanks to better fundamentals, more lending, less uncertainty and the prolongation of the PIVE programme …

… but the margin for improvement is running out: households are still leveraged, the savings rate is at rock bottom and the stimuli are transitory

The momentum of spending on durables relies on their greater income elasticity and on the fact that most consumer items are complementary goods

E-commerce is still used relatively little in Spain. IT literacy, income level, internet banking use and corporate digitisation are all key

1

2

3

4

5

6

Key takeaways

Segundo semestre 2014

Sevilla, 10 de diciembre de 2014

Situación Consumo


Spain and Europe: macroeconomic forecasts Source: BBVA Research based on INE and Eurostat

Appendix

Macroeconomic table

Spain EMU Spain EMU Spain EMU

Households final consumption expenditure -2.3 -0.6 2.1 0.7 1.8 1.3

General government final consumption exp. -2.9 0.2 1.0 0.9 0.9 0.4

Gross fixed capital formation (G.F.C.F.) -3.8 -2.4 0.6 0.6 4.3 1.8

Changes in inventories (*) 0.0 -0.1 0.0 0.1 0.0 0.0

Domestic Demand (*) -2.7 -0.8 1.6 0.8 2.0 1.1

Exports 4.3 2.1 3.7 3.7 5.3 5.1

Imports -0.5 1.2 4.8 4.1 5.5 5.2

External Demand (*) 1.4 0.4 -0.3 0.0 0.1 0.2

GDP mp -1.2 -0.4 1.3 0.8 2.0 1.3

Pro-memoria

Total employment (LFS) -2.8 -0.8 1.0 0.5 1.8 0.6

Unemployment rate (% Active pop.) 26.1 11.9 24.4 11.6 23.1 11.4

Current account balance (% GDP) 1.4 2.3 1.2 2.2 2.1 2.1

Public debt (% GDP) (**) 92.1 90.9 98.2 94.5 99.8 94.4

Public deficit (% GDP) -6.3 -2.9 -5.5 -2.8 -4.2 -2.6

CPI (average) 1.4 1.4 0.0 0.5 1.0 1.0

CPI (end of period) 0.3 0.8 0.3 0.6 1.2 1.1(*) Contribution to GDP Growth

(**) Excluding aid to the banking sector in Spain

(f): forecast

2015 (f)2013 2014 (f)(% YoY)

Economy & Finance

Presentation "Consumption Outlook Spain. Second Half 2014"