MADRID – Not only will a wave of heat hit Spain this summer, but also a wave of optimism about the economy. At least, compared to the state of mind of the inhabitants of other European countries.
Spaniards show the best expectations regarding economic variables such as future income, house price developments and economic growth among the major economies of the Eurozone. This is according to the latest survey on consumer expectations by the European Central Bank (ECB), with data from June.
The survey among 14,000 adults in six eurozone countries (Germany, France, Italy, Spain, the Netherlands and Belgium) is of great importance because expectations play a crucial role in the economy. Consequently, self-fulfilling prophecies are common in this. The results of the survey are also used in the ECB’s monetary policy analysis.
Related: Estimated GDP growth in Spain three times higher than that of the eurozone
Income expectations
Spaniards expect their income to rise by 3% over the next 12 months, compared to the European average of 1.2%. This expectation may be partly due to the wage review agreement reached between employers and unions in Spain in May. On the other hand, Spaniards do not expect to increase their spending as much as their neighbours. Consumption in Spain is expected to grow by 3.3%, compared to the 3.4% average in the major eurozone economies.
Forecast about the economic growth
Interestingly, Spanish household expectations are actually above the consumption forecasts of several analysts and research centres. In terms of economic growth, however, the Spaniards make much lower forecasts than analysts. But, they are still much more optimistic than in the rest of the eurozone. In Spain, respondents predict that the national economy will grow by 0.3% in the coming year.
House price expectations
The Spaniards also believe that, despite the rate hikes, house prices will rise by 3.9% over the next 12 months, as opposed to the 1.4% forecast in Germany or 0.3% in the Netherlands.
Inflation expectations
Regarding inflation, a major concern for the ECB, Europeans perceive prices to have risen by 8% over the past 12 months. At the same time, they predict that the increase will moderate to 3.4% in the next period. However, this is still a high level for the ECB, whose mission is to keep price increases to a maximum of 2%.
Also see: New record in Spain: Lowest unemployment since 2008