After summer faded, households and businesses faced a cautious return to normal life amid clouds of economic worry. There were fears of a recession across Europe and Spain. Yet by late October, data began to show signs of resilience: energy prices cooled, rationing risk eased, and electricity bills started to fall. Inflation pressed on, but consumers and firms held firm. In November, Spanish consumer confidence edged up, and credit card spending, which had hit a low that month, rebounded strongly in December and gained momentum into early January.
This shift is visible in the analysis from Caixabank Research, which relies on anonymous data from point-of-sale terminals across commercial venues. In September, spending by both Spanish and non-Spanish cards in Spain grew at an annual pace of 14 percent. In October, momentum slowed to 9 percent, and November saw spending growth bottom at 7 percent. Yet mid-month brought a renewed outlook as fears of a sudden European or Spanish collapse eased. A genuine slowdown lessened, and December spending accelerated, reaching a 15 percent rise in the final week of the year, aided by fuel stockpiling in the United States and the government’s fuel bonus of 20 cents per liter that continued until January 1. Payments in the transportation category, particularly, rose 20 percent that week after a series of negative rate signals since mid-year.
The tone of card-spend recovery persisted through 2018. There were monthly double-digit gains at times, including a 19 percent rise in the second week of the month. Average card spend grew 13 percent in January, compared with a 10 percent rise in December. When comparing to the previous year, the pattern is influenced by year-ago effects, yet Caixabank Research concludes that consumption held up well. In a report called Consumer Watch, researchers noted that the domestic demand was more active in three channels: in-person card payments, returns, and especially e-commerce, despite the challenging macro environment marked by geopolitical uncertainty, high inflation, and rising interest rates.
Major indicator
Tracking spending via debit and credit cards provides a practical gauge of economic health. It helps form an early view of the broader economy and potential GDP trends. The first-quarter GDP reading for the Spanish economy will be released by the National Institute of Statistics (INE) on April 28, but advanced indicators already illuminate the mood of activity. These indicators include the use of payment cards and the confidence of economic agents. Caixabank Research notes that the year began with better momentum than anticipated.
Looking ahead, Airef, the Independent Institution for Financial Responsibility, forecasts a 0.3 percent GDP rise in the first quarter of the year from the fourth quarter of 2022, with an annual rate near 3 percent when comparing the year to year. In late October, Airef had flagged a technical recession with negative growth in late 2022 and early 2023. Today, the pace appears slower than earlier fears, and most forecast panels, including Funcas, expect more moderate growth for 2023, with projections around 1.3 percent, modestly higher than two months prior. Smoothing the outlook are revisions from labor and services sectors as the economy adapts to shifting global and domestic conditions.