Consumer confidence hits new low in Spain

MADRID: Consumer confidence levels have fallen to a new low in Spain, in recognition of the on-going financial troubles facing the country.

Based on a survey of 1,204 people, the Center for Sociological Research found its regular barometer of popular sentiment stood at 37.6 points in July, on a scale where 100 points indicated a neutral mood, and higher readings reflected public optimism.

This marked a contraction of 13 points compared with June 2012, and a drop of 26 points measured against July 2011. It also came in under the previous lowest total, some 46.3 points, logged in July 2008.

Elsewhere, respondents returned an even more gloomy score of 24.3 points upon appraising the current economic situation.

When assessing the future outlook in this area, the ratings hit 50.8 points, but had still decreased by over 20 points on a monthly basis.

"Domestic demand is likely to remain under considerable pressure, with the intense financial pressure on Spain battering already poor consumer and business sentiment," Raj Badiani, an economist at Global Insight, told Reuters.

Nearly 89% of panellists described Spain's fiscal position as "bad", and 71.5% predicted conditions would get worse.

Over 60% of interviewees similarly reported that their household's financial circumstances had depreciated in the last six months, and 48.4% anticipated a further decline going forward.

Two-thirds of interviewees also revealed they had little or no money left at the end of the month, and a majority believed both interest rates and inflation would increase in 2013, adding extra difficulties.

Elsewhere, recent official data showed that retail sales dropped by 5.2% in June versus the previous month, the 24th such decline in a row.

"These figures are proof that the Spanish economy continues in recession and a drop in retail sales could indicate a GDP contraction of around 2 percent this year," Nicolas Lopez, economist at Madrid broker M&G Valores said.

"For the moment there's no sign this is going to change in the medium term."

Data sourced from Reuters; additional content by Warc staff, 7 August 2012

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