After the beginning of the year which was already marked by a decline in consumption, Everything seems to indicate that it will rebound during the summer months due, above all, for the arrival of international tourists. This is how the General Council of Economists rated this medium, indicating that, However, demand could suffer in the last months of the yeardue to rising interest rates and lower saving capacity of Spanish households.

This issue may specifically affect the thousands of businesses dedicated, among other activities, to trade or hospitality, taking that into account much of the spending that consumers consider “spendable” is found in these sectors. “Logically, all segments are unnecessary, especially home appliances or fashion, which suffer greatly”, appreciated, in this sense, Rafael Torres, president of the Spanish Trade Confederation (CEC).

The decline in consumption in Spain during the last part of the year could become even more acute, according to a report published a few days ago by the Bank of Spain which revealed that Spanish household savings have almost no impact on consumption of goods and services.

As they explained to this media from the General Council of Economists, Spanish families have used up most of the savings they have generated during the pandemic, and the current economic uncertainty, characterized by inflation and rising interest rates, is the main obstacle for them to continue to consume in business. In most cases, excess savings are used to pay for mortgage loan increases.

Economists and the Bank of Spain predict a decline in consumption in the last quarter of 2023

So, Rising interest rates, high inflation the unfinished moderate and as appropriate decline in the saving capacity of Spanish households anticipates a significant reduction in consumption in the fourth quarter of this year, as confirmed by the General Council of Economists and the Bank of Spain itself.

In the second case, Spain’s financial authorities have just published a report showing how the savings accumulated during the pandemic by Spanish households are not working -and will not work- to increase consumption of the goods and services offered by these thousands of businesses and freelancers. year.

Like a detailed report, about 80% of spending from family savings is allocated to expenses related to housinglike rehabilitation to pay off mortgage loanswhose quotas increased rapidly due to rising interest rates or acquisition of financial assetssuch as investment funds or deposits.

In addition, “the capacity to save is severely limited and, in terms of employment, the intermittent ones, which will grow the most over the summer, do not anticipate stabilizing beyond the end of the third quarter”, explains Antonio Pedraza. Therefore, “domestic tourism will be more restrained than international tourism in the coming months,” he said.

On the other hand, the president of the CGE Financial Commission identified two other variables indicating a decline in consumption during the fourth quarter of this year. First, fall in consumer creditone of the most profitable types of loans for banks, “which charge an average interest rate of between 8% and 9%,” says Antonio Pedraza.

“Consumption, when it has recovered strongly in recent years, it is thanks to mixed financing. There are more facilities to finance purchases of, for example, cars than now, because banks impose more demanding terms and households don’t demand those credits to buy,” he explained.

Lastly, the president of the CGE Finance Commission kept that in mind The government has paid more than 40,000 million euros this year in indirect taxes“Punishment for the lower middle class which of course affects consumption,” he concluded.

All this, without taking into account the new interest rate increases announced by the European Central Bank (ECB). According to Antonio Pedraza, it looks like it will be up to 0.25%, up to 4%, though not ruling out another 25 basis point increase in the coming months. In this case, consumption may end the year in an even worse situation than expected.

International tourists will withstand the decline in consumption during the third quarter of this year

Antonio Pedraza, president of the Financial Commission of the General Council of Economists, reminded the newspaper that the decline in consumption was already very noticeable during the first quarter of this year, when it fell by 3.7% “despite growing by over 5% in last year’s total. This is a sharp contraction. very strong for the first quarter. Economically, we barely kept it, growing by 0.3%. Exports and public spending have saved us,” he explained.

However, these bad numbers will start to recover between June and September, high season for tourism, which this year is expected to recover from the pandemic mainly due to the arrival of international travelers. “The savings pool of the countries around us during the pandemic is huge, and it is being consumed at a lower rate than in Spain, because it is more difficult to access it here. Under normal conditions, this would be a good tourist campaign”, anticipates Antonio Pedraza.

However, there are conditions that could exacerbate the situation, such as the economic prospects of the two foreign countries most visited by Spanish tourists. On the other hand,Germany just entered negative technical growth, after two consecutive quarters of growth; And in second place, Great Britain, which is forecast to enter a recession at the end of the year and those whose inflation rate is higher than 10%”, emphasized the president of the CGE Finance Commission.

Given this situation, economists anticipate a positive third quarter in terms of consumption, a trend that may change after the end of the high season. “Our doubt is what will happen from September, due to inflation, interest rates and the reduced ability to save households”, Antonio Pedraza rates this newspaper.

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