Consumption is a key magnitude of the Spanish economy, accounting for more than half of its GDP. During the crisis, it collapsed by 12% of its levels, but resumed the upward path in 2013. The Spanish economy, having just come out of recession, was able to triple its growth rate. Nowadays, voices are rising that consumption in Spain will decelerate as a result of stronger oil prices or a slowdown in the labour market.
In this report we conclude that consumption will expand above consensus forecasts, underpinned mainly by higher wages (which will surprise the market after years of moderation and shortage of workers in some sectors and regions), job creation, rising home prices (which may affect consumption in the ratio of one to ten), and credit.
Our report elaborates on this idea in detail and assesses the contribution of the different variables that have an impact on consumption. We have not only analyzed the weight of these factors on consumption but also their marginal contribution to its projected growth for the next two years. Our nominal and real consumption projections are based on this analysis, as a matter of fact.
Finally, we present the main risks associated with our basic scenario, which we believe to be less than in 2006.