COMMISSION STAFF WORKING DOCUMENT In-Depth Review for Spain in accordance with Article 5 of Regulation (EU) No 1176/2011 on the prevention and correction of macroeconomic imbalances Accompanying the COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK Economic policy coordination in 2021: overcoming COVID-19, supporting the recovery and modernising our economy
Date: 2021-06-02
Institutions: European Commission, Secretariat-General
Subjects: EU employment policy, European Semester, Spain, coronavirus disease, economic recovery, epidemic, fiscal policy, investment policy, macroeconomics, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 2.6.2021  SWD(2021) 404 final  COMMISSION STAFF WORKING DOCUMENT In-Depth Review for Spain                     in accordance with Article 5 of Regulation (EU) No 1176/2011 on the prevention and correction of macroeconomic imbalances  Accompanying the COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK Economic policy coordination in 2021: overcoming COVID-19, supporting the recovery and modernising our economy {COM(2021) 500 final} - {SWD(2021) 401 final} - {SWD(2021) 402 final} - {SWD(2021) 403 final} - {SWD(2021) 405 final} - {SWD(2021) 406 final} - {SWD(2021) 407 final} - {SWD(2021) 408 final} - {SWD(2021) 409 final} - {SWD(2021) 410 final} - {SWD(2021) 411 final} - {SWD(2021) 412 final}  
 
 
CONTENTS 

Executive summary 

1.  Assessment of Macroeconomic Imbalances 

2.  Thematic Issue: External Position 

3.  Thematic Issue: Private Debt 

LIST OF TABLES 

Table 1.1: 

Outward spillover heat map for Spain 

Table 1.2: 

Assessment of Macroeconomic Imbalances Matrix - Spain 

Table 1.3: 

Selected economic and financial indicators, Spain 

Table 2.1: 

Selected external indicators, Spain 

Table 3.1: 

Non-financial corporations debt indicators, Spain 

Table 3.2: 

Household Debt Indicators, Spain 

Table 3.3: 

Selected housing indicators, Spain 

LIST OF GRAPHS 

Graph 1.1: 

Decomposition of Net International Investment Position (NIIP) by sector, Spain 

Graph 1.2: 

Decomposition of debt by sector (consolidated) 

Graph 2.1: 

Trade balance 

Graph 2.2: 

Decomposition of NIIP change 

Graph 2.3: 

Thematic Graphs: External position 

Graph 3.1: 

Thematic Graphs: Private debt 

Graph 3.2: 

Bank loans to households by type 

Graph 3.3: 

Thematic Graphs: Private debt 

LIST OF BOXES 

Box 1.1: 

Spillovers Spain 

1 

3 

12 

16 

6 

9 

11 

14 

20 

20 

21 

4 

5 

12 

13 

15 

16 

18 

19 

8 

 
 
 
 
 
 
 
EXECUTIVE SUMMARY 

The  2021  Alert  Mechanism  Report  concluded  that  an  in-depth  review  should  be  undertaken  for 
Spain to examine further the persistence of imbalances or their unwinding. In February 2020, under 
the  previous  annual  cycle  of  surveillance  under  the  Macroeconomic  Imbalances  Procedure,  the 
Commission identified “macroeconomic imbalances” in Spain. These imbalances related to high external, 
public  and  private  debt  in  a  context  of  still  high  unemployment.  The  analysis  shows  that  these 
vulnerabilities  remain.  It  should  be  noted  that  the  context  of  the  assessment  of  vulnerabilities  in  this 
year’s  in-depth  review  (IDR)  for  Spain  is  markedly  different  from  last  year.  Also,  the  evolution  of  the 
COVID-19 pandemic, the strength of the recovery, and possible structural implications of the crisis are all 
still surrounded by high  uncertainty, requiring caution in the  assessment. In general, policy action over 
the past year focused on cushioning the impact of the COVID-19 shock and facilitating the recovery. This 
has  added  to  indebtedness  but  should  support  adjustment  in  the  medium-term.  Looking  forward,  the 
Recovery  and  Resilience  Plan  provides  an  opportunity  to  address  imbalances,  investment  and  reforms 
needs.   

Main observations and findings of this IDR analysis are: 

  This IDR is informed by the European Commission 2021 spring forecast, which expects a strong 
recovery  in  economic  activity  in  Spain  with  the  easing  of  the  COVID-19  crisis.  After  the  steep 
drop  of  10.8%  in  2020,  real  GDP  is  projected  to  increase  by  5.9%  this  year  and  6.8%  next  year, 
allowing the economy to recover its pre-pandemic level by the end of 2022.  

  Spain’s  net  international  investment  position  remains  very  negative.  The  stock  of  net  external 
liabilities  had  gradually  declined  before  the  COVID-19  pandemic  on  the  back  of  current  account 
surpluses of about 2% of GDP in recent years, but it has remained large (84% of GDP by the end of 
2020) and exceeded prudential and fundamental-based benchmarks. The reduction of Spain’s external 
net  debtor  position  in  terms  of  GDP  came  to  a  halt  in  the  first  half  of  2020,  mainly  due  to  the 
contraction in GDP. The current account surplus declined to 0.7% of GDP in 2020, and is forecast to 
turn slightly negative in 2021 before turning positive again in 2022.  

  Private sector deleveraging needs remain sizeable, despite a significant reduction of debt. Private 
sector debt, in consolidated terms, had been reduced from a peak of 204% of GDP in 2009 to 130.6% 
of  GDP  before  the  COVID-19  pandemic.  The  crisis  led  the  private  sector  debt  ratio  of  the  non-
financial  private  sector  to  increase  to  147.4%  in  the  last  quarter  of  2020,  up  by  17.1  pp.  since  the 
beginning of the year, well above prudential levels and fundamental-based benchmarks. The stock of 
debt  accumulated  by  non-financial  corporations  accounted  to  84.9%  of  GDP  while  total  household 
liabilities amounted to 62.5% of GDP. The increase of private sector debt reflects both the increase of 
indebtedness in the corporate sector and, to a larger extent, the sizeable fall in GDP experienced by 
Spain throughout 2020.  

  The COVID-19 pandemic led to an increase in the general government deficit by more than 8 
percentage  points  to  11%  of  GDP.  The  increase  was  due  to  the  combined  effect  of  the  fall  in 
economic  activity  and  the  measures  put  in  place  to  combat  the  virus  and  to  preserve  employment 
while supporting businesses and households. The general government balance is projected at -7.6% of 
GDP  in  2021.  The  general  government  debt-to-GDP  ratio  remains  high.  It  rose  by  around  25 
percentage points in 2020, to 120% of GDP due to the combined effect of the fall in economic activity 
and  the  fiscal  measures.  The  debt  ratio  is  forecasted  to  start  declining  gradually  in  2021  and  it  is 
projected to reach 116.9% in 2022 as the recovery gains momentum. 

  The fall in employment pushed the unemployment rate up to 15.5% in 2020. The unemployment 
rate is forecast to start falling in 2022. The severe impact of the crisis on labour intensive-sectors may 
still result in additional job losses, while further increases in unemployment cannot be ruled out once 
the short-time work schemes (ERTEs) are phased out (unless proper support is offered to concerned 
workers via effective active labour market policies). 

1 

 
Executive summary 

  The banking sector has remained resilient, but some challenges may emerge going forward. The 
loan moratoria and the public guarantee schemes have prevented the deterioration in asset quality and 
facilitated the flow of credit to the economy. Banking sector capitalization has marginally improved, 
while  the  liquidity  position  of  banks  has  also  remained  reassuring.  While  no  significant  cliff-edge 
effects are expected when loan moratoria expire fully, a more marked deterioration in asset  quality is 
likely  to  emerge  once  support  measures  are  phased  out.  Impacted  by  the  increase  in  loan-loss 
provisions  and  by  one-off  measures  adopted  by  several  banks,  banking  sector  profitability  has 
remained  under  pressure.  Banking  sector  consolidation  has  continued  notwithstanding  the  difficult 
operating environment for banks.  

2 

 
1.  ASSESSMENT OF MACROECONOMIC IMBALANCES 

Introduction  

In  February  2020,  over  the  previous  annual  cycle  of  surveillance  under  the  Macroeconomic 
Imbalances  Procedure,  the  Commission  identified  “macroeconomic  imbalances”  in  Spain.  These 
imbalances  related  to  high  external  and  internal  debt,  both  public  and  private,  in  a  context  of  still  high 
unemployment  and  had  cross-border  relevance.  The  2021  Alert  Mechanism  Report  published  in 
November 2020 concluded that a new in-depth review (IDR) should be undertaken for Spain with a view 
to assess the persistence or unwinding of imbalances.  

The  context  of  the  assessment  of  vulnerabilities  this  year  is  markedly  different  from  last  year's 
IDRs, which took place before the COVID-19 pandemic. The evolution of the pandemic, the strength 
of the recovery, and possible structural implications of the crisis are still surrounded by high uncertainty 
requiring caution in the assessment. Policy action over the past year focused on cushioning the impact of 
the  COVID-19  shock  and  on  facilitating  the  recovery.  While  this  avoided  deeper  imbalances  and  will 
support adjustment in the medium-term through stronger fundamentals, it also has added to indebtedness. 
Follow-up  to  country-specific  recommendations  from  2019  and  2020,  including  those  that  are  MIP-
relevant,  is taking place in the context of the assessment of the Recovery and Resilience  Plans (RRPs). 
The  analysis  of  policies  in  the  present  report  was  finalised  before  the  formal  submission  of  RRPs  and 
does  not  draw  on  information  included  in  RRPs.  It  is  therefore  without  prejudice  to  the  Commission’s 
assessment of RRPs, which is ongoing at the time of publication of this report. 

The assessment follows a similar structure  as the IDRs that were included in Country Reports in 
recent  annual  cycles.  This  chapter  presents  the  main  findings  for  the  assessment  of  imbalances,  also 
summarised in the MIP assessment matrix. The assessment is backed by selected thematic chapters that 
look more at length at the external position and private debt developments. Spillovers and systemic cross-
border implications of imbalances are also taken into account. In addition, also assessments of structural 
issues made in previous IDRs and in the context of fiscal assessments are considered if relevant.  

Macroeconomic context 

The severe outbreak of the COVID-19 pandemic in Spain and the strict lockdown measures taken 
in response to it resulted in an unprecedented decline of 10.8% of GDP in 2020. With the lifting of 
some  restrictions  in  March,  and  the  acceleration  in  the  pace  of  vaccination,  economic  activity  is  set  to 
begin growing over  the second quarter and  to continue  more vigorously in  the second half of the  year. 
Growth is forecast at 5.9% in 2021 and 6.8% in 2022. As a result, Spain’s GDP is expected to return to its 
pre-pandemic  level  by  the  end  of  2022.  Potential  growth  is  forecast  to  recover  from  the  sharp  drop  in 
2020 and reach 1.5% in 2022. The current account balance registered a surplus of 0.7% of GDP in 2020, 
but  is  forecast  to  turn  slightly  negative  at  -0.1%  in  2021  before  recovering  to  0.3%  in  2022. 
Unemployment is forecast to slightly increase in 2021 to 15.7% before starting to fall in 2022, when job 
creation is expected to reduce it to around 14.4% compared to 14.1% in 2019. HICP inflation was slightly 
negative in 2020, but should gradually increase to 1.4% in 2021 and 1.1% in 2022, driven by the gradual 
strengthening of demand as well as upward pressures from prices of electricity and fuels. 

The  economic  recovery  is  expected  to  be  mainly  driven  by  a  rebound  in  domestic  demand. 
Consumption and investment are expected to strengthen, steered by improving economic conditions and 
lower uncertainty, as restrictions on economic activities are phased out. Part of the excess saving caused 
by  the  COVID-19  pandemic  is  expected  to  fade,  spurring  private  consumption,  but  also  boosting 
investment. As was the case with the downturn in 2020, the recovery is also expected to remain uneven 
across  sectors.  Manufacturing  production  is  set  to  pick  up  faster,  while  sectors  with  high  social-
interaction,  such  as  leisure  and  tourism-related  activities,  are  set  to  recover  at  a  slower  pace.  The 
implementation of the Recovery and Resilience Plan (RRP) is expected to play a decisive role, driving the 
rebound in the second half of 2021 and in 2022. The higher absorption of RRF funds envisaged in 2022, 

3 

 
1. Assessment of Macroeconomic Imbalances 

with potential crowding-in effects on private investment and a carry-over effect from 2021, are forecast to 
provide  a  noticeable  boost  to  economic  growth  in  2022.  The  contribution  of  external  demand  to  GDP 
growth is set to turn positive again in 2022, when tourism-related activities are likely to approach their 
2019  level.  Corporate  liquidity  has  been  enhanced  by  a  programme  of  public  guarantees  for  new  bank 
loans and payment  moratoria, among other  measures.  Nevertheless, impaired profitability could lead to 
the materialisation of corporate insolvencies with risks for productive capacity and employment. To limit 
these  risks  in  the  short  term,  in  March  2021  the  authorities  adopted  a  further  package  of  measures  to 
support small and medium-sized firms. 

Imbalances and their gravity 

Spain’s net international investment position (NIIP) remains very negative. Although the stock of net 
external  liabilities (79.6% of GDP in Q3-2019) had gradually declined, it remained large  and exceeded 
prudential and fundamental-based benchmarks (Graph 1.1). The reduction of Spain’s external net debtor 
position in terms of GDP came to a halt in the first half of 2020, mainly due to the contraction in GDP. 
The current account surplus declined to 0.7% of GDP in 2020. The reduction in GDP has led Spain's net 
international investment position to deteriorate from -74% of GDP at the end of 2019 to -84% of GDP by 
end-2020,  which  remains  above  prudential  and  fundamental-based  benchmarks.  Still,  it  is  around  20 
percentage points below the peak reached during the financial crisis, and most of the external debt is held 
by the Government and the Central Bank, which reduces vulnerabilities. 

Graph 1.1:  Decomposition of Net International Investment Position (NIIP) by sector, Spain 

Source: Eurostat 

Private  sector  deleveraging  needs  remain  sizeable,  despite  a  significant  reduction  of  debt.  Private 
sector debt, in consolidated terms, had been reduced to 130.6% of GDP in Q3-2019 (with household debt 
accounting  for  57.4%  of  GDP  and  non-financial  corporation  debt  for  73.2%  of  GDP).  This  is  slightly 
below  the  MIP  scoreboard  threshold  of  133%,  but  well  above  the  prudential  and  fundamental-based 
benchmarks. The crisis caused by the  COVID-19 pandemic led the private sector debt ratio of the non-
financial private sector to increase to 147.4% in the last quarter of 2020, up by 4.1 pp. compared to the 
third and increased by 17.1 pp. since beginning of the year. The stock of debt held accumulated by non-
financial corporations accounted to 84.9% while total household liabilities amounted to 62.5% in terms of 
GDP (Graph 1.2). The increase reflects both the increase of indebtedness in the corporate sector and, to a 
larger extent, the sizeable fall in GDP experienced by Spain throughout 2020. Both in the case of NFCs 
and households, debt ratios are lower than those recorded prior to the global financial crisis, and close or 
below  average  euro  area  levels.  According  to  Commission  estimates,  both  NFCs  and  households  debt 
ratios remain above prudential levels and fundamental-based benchmarks. 

4 

-400-300-200-100010020030012Q413Q414Q415Q416Q417Q418Q419Q420Q4Assets & liabilities, % of GDPAssets, Central Bank (incl reserves)Liabilities, Central Bank (incl reserves)Assets, General GovernmentLiabilities, General GovernmentAssets, MFI (excl central bank)Liabilities, MFI (excl central bank)Assets, Private sectorLiabilities, Private sectorNet int'l investment position (NIIP)  
Graph 1.2:  Decomposition of debt by sector (consolidated) 

1. Assessment of Macroeconomic Imbalances 

Source: Eurostat 

The  general  government  debt  ratio  decreased  slightly  further  in  2019,  but  it  remained  high  at 
95.5% of GDP. In 2020, the COVID-19 pandemic led to an increase in the general government deficit by 
more than 8 percentage points to 11% of GDP due to the combined effect of the fall in economic activity 
and  the  measures  put  in  place  to  combat  the  virus  and  to  preserve  employment  while  supporting 
businesses  and  households.  On  the  positive  side,  tax  revenue  did  not  contract  as  much  as  expected.  In 
addition, some expenditure savings were recorded as certain public services could not be provided during 
the  lockdown.  According  to  the  European  Commission  2021  spring  forecast,  the  general  government 
balance  is  projected  at  -7.6%  of  GDP  in  2021.  In  the  following  year,  as  the  economic  recovery  gains 
momentum  while  some  of  the  crisis-related  measures  expire,  the  balance  is  projected  to  continue 
improving,  to  -5.2%  of  GDP.  In  2021-22,  the  use  of  funding  from  NGEU  should  contribute  to  the 
reduction of the deficit. 

The  government  debt  ratio  reached  120%  of  GDP  in  2020,  but  mitigating  factors  reduce  the 
vulnerability  of  public  finances.  Given  the  large  negative  government  balance,  the  fall  in  economic 
activity and the reclassification of SAREB into the government sector, the general government debt-to-
GDP ratio rose by around 25 percentage points in 2020, to 120% of GDP. The Commission 2021 spring 
forecast projects the ratio to start declining gradually in 2021 and it is projected to reach 116.9% in 2022 
as the recovery gains momentum.  

Following  the  recession  and  fiscal  support  measures,  Spain’s  gross  financing  needs,  estimated  at 
around  25%  of  GDP  in  2020  and  2021,  are  larger  than  prior  to  the  crisis.  However,  market 
conditions  for  financing  debt  have  remained  favourable,  with  comfortable  demand  for  both  long  and 
short-term  government  securities.  Yields  on  10-year  bonds  are  very  low  by  historical  standards,  and 
spreads  against  the  10-year  German  bund  remain  contained.  Consequently,  expenditure  on  interest  has 
fallen  over  the  past  7  years  to  levels  not  seen  since  2010,  despite  the  fact  that  the  total  debt  stock  has 
doubled since that time. In 2020, interest rate expenditure was 2.3% of GDP.  

Unemployment had fallen rapidly before the COVID-19 pandemic, but it remained high at 13.8% 
in Q4-2019. Long-term and, especially, youth unemployment has also fallen steeply since 2013, but more 
than 30% of the active population under 25 was still without a job in Q4-2019. This rate increased above 
40%  in  Q4-2020.  Moreover,  the  share  of  employees  in  temporary  contracts  (26.42%  in  Q4-2019)  was 
significant. High labour market duality has a negative impact on potential growth, productivity, and social 
cohesion, and which, in turn, hampers the correction of imbalances. In response to the COVID-19 crisis 
short-term work schemes (ERTEs) were put in place and will remain in place at least until the end of May 
2021, though now  more targeted to the firms or sectors than at the beginning of the crisis. In addition, 
several  measures  were  taken  to  protect  the  self-employed  by  means  of  tax  deferrals  and  benefits  for 
suspension  of  activity.  These  schemes  have  contributed  to  contain  job  losses  but  not  to  avoid  them 
altogether. Hence, the fall in employment pushed the unemployment rate up to 15.5% on average in 2020 
(16.2%  in  the  fourth  quarter).  Job  destruction  has  affected  to  a  large  extent  employees  on  temporary 
contracts, whose share of total employees dropped to 22.4% in Q2-2020, before rising again to 24.7% in 
Q4-2020. The unemployment rate is forecast to keep increasing slightly in 2021 since the severe impact 
of  the  COVID-19  crisis  on  labour  intensive-sectors  may  still  result  in  additional  job  losses  and  high 
unemployment. The unemployment rate is expected to drop to 14.4% in 2022. 

5 

0501001502002503003500708091011121314151617181920% of GDPGovernmentHouseholdNon financial corporationsPrivate sectorPrivate sector EU28MIP Threshold  
1. Assessment of Macroeconomic Imbalances 

The Spanish economy could be a source of spill-over effects to the rest of the EU. This stems from its 
relatively  large  size  and  its  level  of  integration  with  other  Member  States,  especially  those  with  which 
Spain  has  significant  trade  links,  such  as  Portugal,  and  financial  and/or  banking  linkages,  such  as 
Luxembourg  (see Table 1.1).  Box 1.1  provides  a  quantitative  assessment  of  cross-border  impact  of 
declined Spanish demand in 2020. It shows rather heterogeneous impact across the Member States, with 
Portugal being the most adversely affected. 

Table 1.1: 

Outward spillover heat map for Spain 

Cross-border figures for Spain, expressed as a % of the GDP of the partner country. The darkest shade of red corresponds to 
percentile 95 and the darkest shade of green to percentile 5. The percentiles were calculated for each variable based on 
the full available sample of bilateral exposures among EU countries. The blank spaces represent missing data. Data refer to: 
Imports - 2018, Imports (in value added) - 2015, Financial liabilities - 2018, Financial assets - 2018, Liabilities (to banks) - 2020-Q3, 
Bank Claims - 2020-Q3.  
Source: IMF, OECD, TiVa, BIS and Commission services 

Evolution, prospects, and policy responses 

Spain’s  current  account  surplus  is  forecast  to  remain  lower  than  in  the  past.  The  COVID-19 
pandemic has had a negative impact on both the goods and services balance, but in particular it led to a 
sharp  drop  in  tourism  with  a  drop  in  revenue  of  up  to  80%  in  some  regions.  The  current  account  is 
expected to turn slightly negative in 2021 for the first time in several years. It should recover and become 
slightly positive again in 2022 at 0.3% of GDP. The current account balance required to stabilise the NIIP 
above -35% is estimated at -0.1% of GDP in 2020. The current account norm explained by fundamentals 
is estimated to be 1.4% in 2020 and the cyclically adjusted current account balance is estimated at  -0.9% 
in 2020. 

Private sector deleveraging needs remain for both corporations and households. Due to the COVID-
19 pandemic, the private sector debt ratio increased from 130.3% at the beginning of 2020 to 147.4% in 
the  last  quarter  of  2020.  The  NFCs’  debt  amounted  to  84.9%  while  total  household  liabilities  totalled 
62.5% in terms of GDP. This upward evolution reflects both the increase of indebtedness in the corporate 
sector,  but  also  to  a  larger  extent,  the  sizeable  fall  in  GDP  experienced  by  Spain  in  2020.  With  the 
recovery, GDP growth should contribute to a significant deleveraging of the private sector. 

The  latest  debt  sustainability  analysis  confirms  that  the  country  faces  high  risk  in  the  medium-
term. (1)  Due  to  the  COVID-19  crisis  measures,  public  debt  has  increased  and  is  forecast  to  increase 
further going forward, and Spain’s gross financing needs, estimated at around 25% of GDP in 2020 and 
2021, are larger than prior to the crisis. However, the public debt to GDP ratio is forecast to fall with the 
recovery, to 116.9% of GDP in 2022, compared to 120% in 2020. Furthermore, asset purchases by the 
Eurosystem on the secondary market are expected to continue to stabilise the sovereign debt market. In 
addition, the government debt profile mitigates vulnerabilities. Its average maturity has lengthened over 
time, and is projected to reach 8 years this year. Longer maturities make it likely that interest payments 
would remain contained by historical standards throughout the projection period even under more adverse 
conditions. 

Unemployment is set to gradually decline as the recovery picks up. The unemployment rate stopped 
its rapid decline from previous years and increased, to 15.5% in 2020. This increase will not be reversed 
in  2021,  since  the  severe  impact  of  the  COVID-19  crisis  on  labour  intensive-sectors  may  still  result  in 
additional job losses and high unemployment, while further increases cannot be ruled out once ERTEs are 
phased  out.  The  unemployment  rate  is  forecast  to  increase  to  15.7%  in  2021  and  to  start  decreasing 

(1)  See Article 126(3) report (June 2021) and also the Debt Sustainability Monitor 2020 for detailed methodological aspects.  

6 

ATBEBGHRCYCZDEDKEEELESFIFRHUIEITLTLULVMTNLPLPTROSESISKImports0.92.91.20.50.12.71.61.10.80.90.62.22.51.81.61.16.70.70.43.11.39.210.81.52.6Imports (in value added)0.50.90.80.50.21.10.80.60.50.30.511.31.50.80.71.80.40.70.80.83.60.70.50.71.1Financial liabilities4.590.90.21.40.57.64.41.74.2 2.312.41.3258.70.5325.6221.629.70.629.10.34.42.73Financial assets1.73.22.30.21.612.21.40.66.9 2.45.71.0723.210.20.22850.84.7152.450.71.11.30.10.7Liabilities (to banks)1.21.31.91.40.2514.85.58.30.1Bank claims1.61.40.20.10.40.12.11.70.10.22.23.70.16.25.20.0434.10.037.82.39.7551.21.30.10.3EU partner 
 
   
 
                                                           
1. Assessment of Macroeconomic Imbalances 

afterwards, to 14.4% in 2022. Gross wages and salaries per employee declined by 4.2% in 2020, but are 
forecast to increase afterwards, with the growth rate increasing to 2% in 2022. 

Overall assessment 

After significant progress in reducing imbalances in previous years, the COVID-19 crisis has led to 
an increase in debt ratios, to a substantial extent due to the decline in GDP. Vulnerabilities linked to 
external, private sector and government debt remain. The negative impact of the COVID-19 pandemic on 
tourism has been very significant and will also be felt in 2021, where the current account is expected to 
turn negative for the first time in recent years. Government debt increased substantially in 2020 and, on 
account of high government deficits, is forecast to continue increase again this year and next. Private debt 
in  percent  of  GDP  increased  due  to  the  drop  in  GDP,  but  also  due  to  a  higher  indebtedness  of  the 
corporate sector. 

Up  until  the  COVID-19  pandemic,  policy  action  to  reduce  the  stock  of  imbalances  was  limited 
across most policy areas. Notably, measures to reduce labour market segmentation by fighting the abuse 
of  temporary  contracts  were  not  very  effective;  limited  progress  was  made  in  the  area  of  fiscal 
governance, and on reforms aimed at reducing skills mismatches, fostering research and innovation and 
improving  the  business  environment.  Complex  administrative  procedures  and  regulatory  restrictions 
imposed on service providers continue to weigh on business environment. Furthermore, the relinking of 
pensions  to  inflation  risks  worsening  long-term  fiscal  sustainability,  unless  the  planned  offsetting 
measures  are  sufficiently  ambitious.  The  outbreak  of  the  COVID-19  pandemic  led  the  authorities  to 
implement policies cushioning the economic impact of the pandemic and fiscal consolidation efforts were 
suspended with the activation of the general escape clause of the Stability and Growth Pact. 

The implementation of policy measures in the Recovery and Resilience Plan can prove decisive in 
mitigating some outstanding vulnerabilities of the Spanish economy and steering a reduction of the 
existing imbalances. The economic impact of the RRF funds on the Spanish economy will be significant, 
particularly from 2022, when strong demand effects and possible carry-over effects from 2021 should be 
accompanied  by  a  gradual  contribution  from  the  supply  side. The  Spanish  authorities  estimate  that  the 
fully-fledged  implementation  of  the  Recovery  and  Resilience  Plan’s  measures  will  increase  economic 
output  by  2 percentage  points  on average  per  year.  Sustained  GDP  growth  will  be  a  driver  of 
the needed deleveraging process both in the private and public sector. In addition, measures may go some 
way  towards  addressing  persistent  labour  market  segmentation.  Actions  aimed  at  the  upskilling  of  the 
labour  force  can  enhance  the  country’s  competitiveness,  producing  positive  spillovers  and enhancing 
Spain’s  external  position.  The  commitment  to  the  industry-services  ecosystem,  and  the  boost  to 
entrepreneurship  will  account  for  an  estimated  improvement  of  0.2  percentage  points  in  the  long-term 
growth  rate  of  exports,  according  to  Spanish  authorities.  On  the  unemployment  front,  the  Spanish 
Government  estimates  the  RRP  can  generate  up  to  800  000  new  jobs  and  push  the  unemployment 
rate below the pre-crisis levels by 2023. 

7 

1. Assessment of Macroeconomic Imbalances 

Box 1.1: Spillovers Spain 

The  pandemic  recessions  in  EU  Member  States  also  reflected  faltering  cross-border  demand  from 
trade partners. The drop in Spanish aggregate demand due to the pandemic and the containment measures 
played a significant role in the output declines of its closest partners. In the recovery, cross-border spillovers 
may undo their negative impact of 2020, yet the uncertain timing and extent of the recovery make a forward-
looking assessment difficult. As a first step, this box thus aims to take stock of the heterogeneous spillovers 
of Spanish demand to other Member States’ value added in 2020. It quantifies cross-border effects applying 
latest  production  data  to  input-output  estimates. (1)  This  allows  for  synthesising  supply  chain  effects,  e.g. 
detailing how Spanish consumption from domestic providers affected those providers’ foreign suppliers, and 
their  suppliers  in  turn.  While  these  results  allow  for  country-specific  sectorial  detail,  note  that  they  reflect 
partial  equilibrium  effects  in  the  goods  and  services  market  only  –  they  do  not  include  any  second-round 
effects on foreign wage income, interest rates, prices etc., which may be stronger.  

Graph  1a  shows  the  overall  cross-border  impact  of  the  heterogeneous  final  demand  changes  during 
2020, and highlights the Spanish contribution therein. Overall, 1.2 pp of the 2020 EU output decline can 
be attributed to cross-border demand effects,  with  Spanish demand accounting for over 0.1 pp thereof. Yet 
small  open  service-intensive  economies  were  hit  stronger  than  the  average.  In  contrast,  RoEU  demand 
spillovers accounted for only 0.3 pp of the Polish output slump. The importance of Spanish demand varies 
significantly  across  partners,  with  particular  relevance  for  neighbouring  Portugal.  Namely,  one  third  of  the 
VA impact in Portugal due to intra-EU demand changes is driven by a reduction in Spanish demand, whereas 
this share is almost negligible for the Baltics. 

Graph  1b  highlights  the  heterogeneous  effects  of  the  pandemic  by  zooming  in  on  the  Spanish 
contribution by sector (the dark-blue bar in Graph 1a). (2)  The most relevant are indirect spillovers, which 
captures supply chain interlinkages. (3) Such indirect cross-border spillovers account for a major part of the 
total impact of Spanish demand on the RoEU output loss. The decline in Spanish tourists accounted for the 
bulk  of  Spanish  demand  spillovers  to  Croatia  or  Malta,  Bulgaria,  and  neighbouring  Portugal.  Demand 
changes  for  non-tourist  services  had  relatively  small  impact.  Changes  in  the  final  demand  for  industry 
products had an impact on Portugal, France, Czechia and Slovakia in particular.  

(1)  The  estimates  derive  from  a  two-step  analysis:  1)  Compiling  2020  output  declines  at  the  sector-level  across  the 
globe. For  the  EU  Member  States,  detailed  information  for  2020  is  available  in  Eurostat.  For  non-EU  countries, 
sectoral  output  changes  in  2020  are  approximated  by  IMF  WEO  GDP  changes,  thus  implicitly  abstracting  from 
sectoral heterogeneity; 2) Using output changes in all country-sector pairs to trace back changes in final demand, based 
on global supply chain interlinkages as captured by the OECD ICIO tables. The resulting set of final demand changes 
can then be used to simulate the impact of the COVID-19 crisis on each country-sector's value added. Two important 
assumptions are made to allow for such a translation of output changes into demand changes. First, the technological 
coefficient matrix, which captures the required amount of supplies from any sector to produce a given sector's output, 
is assumed to have remained fixed since the latest ICIO data (2016). Second, the country allocation final demand for a 
specific sector is assumed to have remained proportional to 2016.  

(2)  Distinguishing by the source of the demand allows to quantify the impact of demand changes in a certain country on 
VA  production  in  all  its  trading  partners,  by  type  of  good  or  service.  Given  the  particular  nature  of  the  COVID-19 
crisis, with a strong impact on hospitality sectors, the analysis distinguishes between tourism (NACE sector I), all other 
services (G-N excl. I) and industry (A-F). 

(3)  For example, a drop in Spanish demand for Spanish cars reduces German production of engines, with a knock-on effect 

on Czech suppliers of engine parts. 

8 

-3-2.5-2-1.5-1-0.50PRTLUXFRAMLTSVKCZEHUNHRVBELIRLITADEUBGRNLDSVNGRCAUTFINROUDNKESTSWEPOLLTULVACYPEUEAGraph 1a: VA impact (%) of cross-border demand change 2019-2020ESPRest EU-0.7-0.6-0.5-0.4-0.3-0.2-0.100.1PRTLUXMLTFRASVKCZEHUNHRVBELIRLITADEUBGRNLDSVNGRCAUTROUFINDNKESTSWEPOLLTULVACYPEUEAGraph 1b: VA impact (%) of change in DEU demand 2019-2020 by categoryIndustryServicesTourismIndirect 
 
   
 
 
 
 
 
Table 1.2: 

Assessment of Macroeconomic Imbalances Matrix - Spain 

1. Assessment of Macroeconomic Imbalances 

Table (continued) 

(Continued on the next page) 

9 

 Gravity of the challenge Evolution and prospects Policy response Imbalances (unsustainable trends, vulnerabilities and associated risks) External position Spain maintains a highly negative net international investment position. It was improving up until the outbreak of the pandemic, but increased from -74% of GDP at the end of 2019 to 84% of GDP at end-2020, mainly composed of debt instruments. This is still clearly worse than the prudential benchmark and the level explained by fundamentals. The composition of Spain’s external liabilities in terms of instruments and maturity contributes mitigates some of the vulnerabilities. The NIIP excluding non-defaultable instruments (NENDI), stood at -52% in 2020.  Since 2017 and until the Covid-19 crisis, the current account balance remained steadily positive, around 2% of GDP. In 2020 it contracted by 1.4 pps to 0.7% of GDP. The reduction of Spain’s external net debtor position came to a halt in the first half of 2020, mainly due to the contraction in GDP. The current account surplus was 0.7% in 2020, and is expected to turn slightly negative in 2021 (-0.1% of GDP) before turning again positive in 2022 (0.3% of GDP) with the recovery of tourism. That as well as the recovery in GDP is expected to yield a resumption of the improving path of the NIIP. Since the global financial crisis, there has been a structural improvement in Spain's trade performance, as confirmed by the increase in the number of regular exporters, and as well as a reduction in the elasticity of imports to final demand, which plays an important role in preserving Spain's external surplus the next years. This is corroborated by the cyclically-adjusted current account balance, which has been in surplus since 2014. Cost competitiveness improved after the global financial crisis thanks to continued wage moderation. Productivity growth considerably worsened in 2020, partly due to labour hoarding, should turn positive in 2021 and 2022. Likewise, unit labour costs, after peaking in 2020, will shrink both in 2021 and 2022.   Before the pandemic Spain’s current account surplus was about 2% of GDP. Reducing decisively Spain´s large external liabilities would require sustaining current account surpluses of this size for an extended period of time.  The measures that will be implemented in the Spanish Recovery and Resilience Facility (RRF) can contribute to raising competitiveness by improving labour market skills and through investment in research and innovation. Moreover, the investment in renewable energy generation and energy efficiency should lead to a decrease in imported energy.  Public debt Before 2020, the general government debt-to-GDP ratio was on a downward path and stood at 95.5% of GDP in 2019. It rose by around 25 percentage points in 2020, to 120% of GDP due to the large negative government balance, the fall in economic activity and the inclusion of SAREB’s liabilities in the total public debt.  While Spain does not appear to face fiscal sustainability risks in the short run, in the medium term risks persist due to the worsening outlook for public finances caused by the pandemic, both regarding the level of government debt and budgetary position. Prior to the outbreak of the pandemic, the government debt ratio was on a declining trend. The drop in GDP and the crisis measures lead to a sharp deterioration of public finances in Spain with the public deficit increasing to 11% in 2020. However, the favourable conditions for debt financing and the longer average maturity of public debt over the past years (projected to reach 8 years in 2021) will mitigate vulnerabilities. According to the Commission forecast, with the rebound in nominal GDP growth, public debt is expected at 119.6% of GDP in 2021 and further decrease by 3 pps in 2022. The Commission 2021 Spring forecast foresees the deficit to gradually narrow in 2021 and 2022 (7.6% and 5.2% respectively), down from 11% in 2020, notably due to a recovery of GDP. The structural balance deficit is projected to remain high at 4.9% in 2021 and 5.2% 2022. There has been little progress in the areas of fiscal governance, notably regarding the implementation of plans to strengthen the framework for public sector contracts and public procurement. The relinking of pensions to inflation risks to worsen the long-term fiscal sustainability, unless the planned offsetting measures are sufficiently ambitious.  Private debt The debt of the private sector stood at 147.4% of GDP (in consolidated terms) in Q4-2020, representing an increase of 17.1 pps since the beginning of 2020. The debt of non-financial corporations (NFCs) accounted for 84.9% of GDP and household debt to 62.5% of GDP. Both in the case of NFCs and households, debt ratios are well above prudential and fundamental-based benchmarks indicating that strong deleveraging needs persist for both cases. Notably, NFCs debt level stands 30 pps and 25 pps above the prudential threshold and the fundamental benchmark, respectively. Before the pandemic the debt to GDP ratio of the private sector had been on a declining path since its peak in 2010, mainly thanks to the strong growth of the Spanish economy and reflecting moderate credit flows. Following the outbreak of the pandemic, the private sector debt ratio level accelerated again, caused by notably an increase of indebtedness in the corporate sector right after the COVID-19 outbreak and, to a larger extent, the sizeable fall in GDP experienced by Spain in 2020.  A slight tightening of credit standards for NFCs and households in the first quarter of 2021 was observed. This reflects primarily the perception by banks of a deteriorating general economic outlook and the increasing credit risk of borrowers. There has also been a decline in demand for housing, which is expected to be A comprehensive reform aimed at the modernisation of the insolvency framework is expected to be implemented by end-2021. It will facilitate preventive debt restructuring while improving the effectiveness of pre-insolvency and second chance instruments.      
  
 
 
 
1. Assessment of Macroeconomic Imbalances 

Source: European Commission Services 

10 

 reverse in the second quarter of 2021. The borrower relief measures coupled with the public guarantee schemes have prevented a deterioration in asset quality and kept bankruptcies at its pre-pandemic level. As a result the total volume of loans classified as non-performing (NPL) decreased to 4.6% at the end of 2020, down from 4.8% at the end of 2019. While no significant cliff edge effects are expected when such measures and moratoria expire, a more marked deterioration in asset quality is likely to emerge in 2022 Adjustment issues Unemployment  The unemployment rate increased by 1.5% pps from 2019 to 2020 to 15.5%, but there was a substantial amount of labour hoarding due to short-time work schemes (ERTEs). Persistently high unemployment hampers the adjustment process.  Unemployment had declined rapidly prior to the outbreak of the pandemic, but the pandemic is expected to accentuate the severity of pre-pandemic issues especially regarding youth and the long-term unemployed.  The short-time work schemes (ERTEs) contributed to containing job losses although not avoiding them altogether. Thus, further job losses cannot be ruled out once the ERTEs will be phased out. The unemployment rate is expected to gradually revert to pre-pandemic levels from 2022, also on the back of the relatively strong projected growth in GDP. In particular, it is set to further increase slightly to 15.7% in 2021 as the severe impact of the crisis on labor intensive sectors may still result in additional job losses, before dropping to 14.4% the following year, according to the Commission Spring forecast. Youth unemployment remains very high (40.3% in Q4-2020). Both rates remain among the highest in the EU. High levels of labour market segmentation (permanent vs. temporary employment) persist.   Short-time work schemes (‘ERTEs’) have been extended several times over the COVID-19 crisis. In addition, several measures were taken to protect the self-employed by means of tax deferrals and benefits for suspension of activity.  Main takeaways  The COVID-19 crisis has exacerbated the imbalances that existed for several years in Spain. In particular, Spain continues to be characterised by a combination of still large stock of external and internal debt, both public and private, which were improving before the COVID-19 crisis but which have been hiked with this latest crisis. This leaves the country exposed to adverse shocks or shifts in market confidence, which could translate into a tightening of credit conditions on the international markets, which would have harmful implications for the real economy, especially given the still high level of unemployment.  The current account experienced a deterioration due to the impact of the pandemic and is expected to turn slightly negative in 2021 before rebounding in 2022. Reducing decisively Spain´s large external liabilities would require maintaining current account surpluses for a sustained period of time. Private sector debt hiked in 2020 due to the increase in corporate indebtedness and the fall in GDP, and substantial deleveraging needs persist. Public debt is set to gradually decrease after jumping up in 2020, with deficits forecast to significantly narrow, but remain high, after peaking to 11% in 2020. Sustained GDP growth in the next years will also be a driver of the deleveraging process both in the private and public sector. Unemployment and youth unemployment have increased during the pandemic and will remain very high and above pre-pandemic levels.  The implementation of policy measures under the Recovery and Resilience Facility (RRF) can prove decisive in addressing the outstanding vulnerabilities of the Spanish economy. The RRF is expected to boost GDP, while the mix of reforms and investments funded by the RRF aim at raising Spain’s competitiveness by upskilling the labour force and reduce the segmentation of the labour market. Investment in research and innovation can contribute to strengthening the external position by strengthening competitiveness, and investments in renewable energy and energy efficiency can reduce the import of energy. Moreover, measures strengthening the business environment, including the envisaged modernisation of the insolvency framework and debt relief for natural persons, could improve the outlook for private indebtedness and facilitate resource reallocation. While Spain does not face fiscal sustainability risk in the short turn, the worsening economic outlook could pose a challenges in the medium term. Further policy progress is also needed regarding fields such as the fiscal framework and removing unnecessary regulatory burden on firms.    
 
 
Table 1.3: 

Selected economic and financial indicators, Spain 

1. Assessment of Macroeconomic Imbalances 

(1) NIIP excluding direct investment and portfolio equity shares         
(2) domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU 
foreign-controlled branches.         
(3) The tax-to-GDP indicator includes imputed social contributions and hence differs from the tax-to-GDP indicator used in the 
section on taxation         
(4) Defined as the income tax on gross wage earnings plus the employee's social security contributions less universal cash 
benefits, expressed as a percentage of gross wage earnings 
Source: Eurostat and ECB as of 2021-05-05, where available; European Commission for forecast figures (Spring forecast 2021) 

11 

2004-072008-122013-182019202020212022Real GDP (y-o-y)3.6-1.30.92.0-10.85.96.8Potential growth (y-o-y)3.40.80.21.70.01.71.5Private consumption (y-o-y)3.9-2.01.50.9-12.16.45.8Public consumption (y-o-y)5.71.40.12.33.82.71.9Gross fixed capital formation (y-o-y)5.7-8.53.32.7-11.49.612.7Exports of goods and services (y-o-y)4.61.04.42.3-20.210.412.8Imports of goods and services (y-o-y) 8.3-5.24.20.7-15.811.711.7Contribution to GDP growth:Domestic demand (y-o-y)4.9-3.00.71.5-8.56.16.3Inventories (y-o-y)0.0-0.20.1-0.1-0.30.00.0Net exports (y-o-y)-1.31.80.00.6-2.0-0.20.5Contribution to potential GDP growth:Total Labour (hours) (y-o-y)1.5-0.3-0.20.7-0.50.90.6Capital accumulation (y-o-y)1.70.70.20.50.10.20.4Total factor productivity (y-o-y)0.20.40.20.50.50.60.6Output gap3.2-4.1-4.21.8-9.3-5.00.0Unemployment rate9.219.120.814.115.515.714.4GDP deflator (y-o-y)3.80.50.61.41.11.01.1Harmonised index of consumer prices (HICP, y-o-y)3.22.30.80.8-0.31.41.1Nominal compensation per employee (y-o-y)3.92.60.62.11.40.52.0Labour productivity (real, person employed, y-o-y)-0.21.70.3-0.3-7.0..Unit labour costs (ULC, whole economy, y-o-y)3.40.40.02.45.2-0.8-2.6Real unit labour costs (y-o-y)-0.4-0.1-0.61.04.1-1.8-3.6Real effective exchange rate (ULC, y-o-y)2.4-1.7-0.6-0.8...Real effective exchange rate (HICP, y-o-y)1.2-0.50.2-1.60.80.5-0.8Net savings rate of households (net saving as percentage of net disposable income)3.14.62.32.0...Private credit flow, consolidated (% of GDP)27.1-0.7-4.01.24.3..Private sector debt, consolidated (% of GDP)166.6198.3154.8129.5147.4..of which household debt, consolidated (% of GDP)73.583.267.856.962.5..of which non-financial corporate debt, consolidated (% of GDP)93.1115.187.072.684.9..Gross non-performing debt (% of total debt instruments and total loans and advances) (2).4.45.42.7...Corporations, net lending (+) or net borrowing (-) (% of GDP)-3.95.96.45.15.65.45.9Corporations, gross operating surplus (% of GDP)20.423.824.024.222.623.024.5Households, net lending (+) or net borrowing (-) (% of GDP)-4.5-0.20.70.36.52.60.0Deflated house price index (y-o-y)9.7-8.23.34.12.1..Residential investment (% of GDP)11.36.94.65.75.5..Current account balance (% of GDP), balance of payments-7.8-3.92.12.10.7-0.10.3Trade balance (% of GDP), balance of payments-5.0-0.93.33.01.5..Terms of trade of goods and services (y-o-y)0.5-0.9-0.1-0.61.4-0.4-0.3Capital account balance (% of GDP)0.60.40.40.30.4..Net international investment position (% of GDP)-70.5-91.3-88.2-73.9-84.3..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (1)-39.5-71.8-62.3-46.8-52.9..IIP liabilities excluding non-defaultable instruments (% of GDP) (1)121.0155.2156.2159.8187.5..Export performance vs. advanced countries (% change over 5 years)7.8-4.4-0.90.8-2.0..Export market share, goods and services (y-o-y)-2.7-3.80.6-1.0-10.02.37.1Net FDI flows (% of GDP)4.00.10.00.81.0..General government balance (% of GDP)1.3-9.2-4.6-2.9-11.0-7.6-5.2Structural budget balance (% of GDP)..-1.8-3.7-4.2-4.9-5.2General government gross debt (% of GDP)40.761.998.195.5120.0119.6116.9Tax-to-GDP ratio (%) (3)36.332.334.735.437.536.735.7Tax rate for a single person earning the average wage (%) (4)20.421.122.121.321.1..Tax rate for a single person earning 50% of the average wage (%) (4)10.69.710.56.46.4..forecast 
        
 
2.  THEMATIC ISSUE: EXTERNAL POSITION 

Prior  to the outbreak of the COVID-19 pandemic, Spain’s external net debtor position narrowed 
steadily. Notably, high nominal GDP growth and continued external surpluses drove a slow but persistent 
narrowing of Spain's negative net international investment position (NIIP) to 74% of GDP at the end of 
2019.  

Despite  the  impact  of  the  COVID-19  pandemic  and  the  large  drop  in  tourism-related  activities, 
Spain’s  current  account  surplus  remained  positive  at  0.7%  of  GDP  in  2020.  It  is  forecast  to  turn 
slightly  negative  in  2021  (-0.1%  of  GDP)  before  turning  positive  again  in  2022  (0.3%  of  GDP).  The 
surplus is the result of a positive balance in services,  which more than offsets the trade deficit in goods 
(see Graph 2.1). The large import of energy products accounts as the main factor underlying the negative 
trade  balance  in  goods.  Overall,  the  level  of  both  exports  and  imports  dropped  in  2020,  against  a 
background  of  declining  global  growth  due  to  the  crisis  and  the  sharp  drop  in  tourism.  Although  the 
contribution of net exports to growth was negative in 2020, it is expected to turn positive again in 2021 
and 2022. 

Graph 2.1: 

Trade balance 

Source: Eurostat 

The reduction of Spain’s external net debtor position  in terms of  GDP came to a  halt in the first 
half  of  2020,  mainly  due  to  the  sharp  contraction  in  GDP.  The  reduction  in  the  level  of  economic 
output  led  Spain's  NIIP  to  worsen  to  -84%  of  GDP  by  end-2020,  which  remains  below  prudential  and 
fundamental-based  benchmarks,  but  still  7  percentage  points  above  the  trough  reached  during  the 
financial crisis (Table 2.1). In 2020, the net borrowing position of the government widened substantially, 
partly offset by a considerable increase in household savings (Graph 2.3(b)). 

12 

-10-8-6-4-2024681002030405060708091011121314151617181920% of GDPServicesGoods, exceptenergy productsEnergy productsTotal 
 
 
Graph 2.2:  Decomposition of NIIP change 

2. Thematic Issue: External Position 

Source: Eurostat 

The composition of Spain’s external liabilities in terms of instruments and maturity mitigates some 
of the vulnerabilities. The NIIP excluding non-defaultable instruments (NENDI), which accounts for the 
riskiest categories of external liabilities (2), stood at -53% of GDP in 2020, above the prudential threshold 
of  -58%.  The  reduction  of  the  NENDI  since  2011 (by  25 p.p of  GDP),  has  been  faster  than  that  of  the 
NIIP  (a  decline  of  14 p.p).  This  broadly  reflects  an  improvement  in  the  net  foreign  direct  investment 
(FDI)  position  due  to  sizeable  foreign  investment  inflows,  which  help  mitigating  the  overall  degree  of 
vulnerability (Graph 2.2; Graph 2.3(c)). Moreover, a sizeable part of external debt – slightly over 40% in 
2020 Q4 – is composed of central bank liabilities stemming from monetary operations of the Eurosystem 
(Graph 5), entailing substantial lower refinancing risk than that of the debt held by the private sector. In 
addition, the structure of government debt - displaying an increasingly longer average maturity of 8 years 
at the end of 2020- contributes to reducing the overall risk profile.  

Reducing  decisively  Spain´s  large  external  liabilities  would  require  maintaining  large  current 
account  surpluses  for  a  sustained  period  of  time.  Spain’s  NIIP  is  still  far  from  a  level  that  could  be 
considered prudential (-58% of GDP in 2020) or in line with fundamentals (-22% of GDP) (Table 2.1). 
The  measures  that  will  be  implemented  in  the  Spanish  Recovery  and  Resilience  Program  to  raise 
competitiveness  by  improving  labour  market  skills  and  through  investment  in  research  and  innovation 
will also help strengthening the external position. These measures will also help a reduction of imported 
energy through the promotion of renewable energy. 

(2)  The instruments that make up the NENDI (mostly debt) are the most risky part of the NIIP as it excludes equity and equity-like 
instruments (inter-company debt). Equity does not carry the same risks as debt for external sustainability, as its remuneration 
(e.g. dividend payments) can be adjusted during economic downturns, unlike most of forms of debt. 

13 

-15-10-5051011Q412Q413Q414Q415Q416Q417Q418Q419Q420Q4Change in pp. of GDP (y-o-y)Valuation changesNet transaction effect (rest FAbal.)Investment income effectNominal growth effectChange in NIIP (y-o-y)  
 
                                                           
Table 2.1: 

Selected external indicators, Spain 

2. Thematic Issue: External Position 

NA=National Accounts, BoP=Balance of Payments, CA=Current Account, NENDI= NIIP excluding non-defaultable 
instruments,TB= Trade Balance.              
(1) Flow data refer to national account concept, unless indicated otherwise.              
(2) Cyclically adjusted CA is the CA adjusted for the domestic and foreign output gaps, taking into account trade openness.              
(3) The average CA needed in order to stabilise the NIIP in 20 years is based on T+10 Ecfin projections.              
(4) Current account norm is the current account balance that can be explained by fundamentals. It is based on the 
empirical setup similar to IMF’s EBA. Fundamentals are slow-moving variables including: demographics, relative income, 
natural resources, manufacturing intensity and reserve currency status. See Coutinho et al. (2018) "Methodologies for the 
assessment of current account benchmarks", European Economy, Discussion Paper 86/2018, for the description of the 
methodology.             
(5) The CA or TB needed either to halve the distance to fund. NIIP benchmark, or to reach the prud. NIIP benchmark in 10Y, 
whichever is higher. Based on T+10 Ecfin projections.             
(6) The country-specific prudential benchmark denotes the NIIP level beyond which the probability of an international 
economic and financial crisis becomes higher. The NIIP level explained by fundamentals (‘NIIP norm’) represents the NIIP that 
would result if a country had run its current account in line with fundamentals since 1995. For details see Turrini and Zeugner 
(2019), "Benchmarks for Net International Investment Positions", European Economy, Discussion Paper 097/2019.             
Source: (a) Eurostat, (b) Ameco, (c) European Commission calculations 

14 

2003-072008-122013-172018201920202021f2022fFlows (1)Source:CA balance as % of GDP, NA(b)-7.0-3.92.3|1.92.10.7-0.10.3CA balance as % of GDP, BoP(a)-7.0-3.92.3|1.92.10.7-0.10.3Cyclically adj. CA balance as % of GDP (2)(c)-5.8-5.20.4|1.82.3-0.9-1.00.5CA req. to stabilize NIIP above -35% (3)(c)-0.31.60.4|0.20.1-0.1-0.7-0.6CA explained by fundamentals (CA norm) (4)(c)-2.3-0.90.5|1.21.31.41.21.6Required CA for specific NIIP target (5)(c)0.02.42.0|2.32.32.32.02.2Trade bal. G&S, % of GDP, NA(b)-4.4-0.93.5|2.73.01.51.11.4Required TB for specific NIIP target (5)(c)2.65.52.0|2.02.42.52.12.3Capital account bal. as % of GDP, NA(b)0.60.40.4|0.50.30.40.50.5StocksNENDI as % of GDP(a)-36-72-65|-52-47-53of which: net portfolio debt(a)-20-42-44|-37-42-43of which: net mutual fund shares(a)3413|171924of which: net other investment(a)-20-37-38|-36-29-39NIIP as % of GDP(a)-67-91-90|-79-74-84-81-78Prudential NIIP/NENDI benchmark (6)(c)-64-61-59|-62-63-58-60-60Fundamentally expl. NIIP benchmark (NIIP norm) (6)(c)-23-25-28|-23-22-22-18-15 
 
 
 
 
 
      
 
Graph 2.3: 

Thematic Graphs: External position 

2. Thematic Issue: External Position 

Source: European Commission Services 

15 

950100010501100115012001112131415161718192021*Constant 2015 EUR bn(a) Demand, output and trade balance Trade balanceAgg. demandOutput (GDP)Source: Ameco-15-10-505101508091011121314151617181920*21*22*% of GDP(b) Net lending/borrowing by sector CorporationsGeneral governmentHouseholds and NPISHTotal economySource:Ameco05010015020025030035007091113151719% of GDP(d) IIP gross assets (A) and liabilities (L)Other inv liabOther inv assetsPortfolio inv, debt liabPortfolio inv, debt assetsDirect inv, liabDirect inv, assetsFinanc deriv liabFinanc deriv assetsPortfolio inv, equity liabPortfolio inv, equity assetsReserve assetsSource: Eurostat-150-100-5005008091011121314151617181920% of GDP(c) Decomposition of NIIP by instrument Reserve assetsNet portfolio investment, equity and investment fund shares/unitsNet portfolio investment, debt securitiesOther investment (net)Net direct investmentNet financial derivatives and employee stock optionsNet Int'l investment position (NIIP)NENDI (NIIP excluding non-defaultable instruments)Source: Eurostat 
      
3.  THEMATIC ISSUE: PRIVATE DEBT 

Situation entering the COVID-19 crisis 

Up until the end of 2019, the stock of private debt was on a declining trend, largely supported by 
the constant GDP growth- albeit deleveraging needs persisted. Private debt dropped from above 200% 
in 2010 to 129.8% of GDP in consolidated terms at the end of 2019.  

Following  the  outbreak  of  the  COVID-19  pandemic  and  the  implementation  of  diverse  support 
measures  aimed  at  mitigating  its  impact,  the  private  sector  debt  ratio  accelerated.  The  debt 
accumulated by the non-financial private sector increased to 147.4% in the last quarter of 2020, up by 4.1 
pp. compared to the third and increased by 17.1 pp. since beginning of the year. This upward evolution 
reflects both the increase of indebtedness in the corporate sector and, to a larger extent, the sizeable fall in 
GDP experienced by Spain in 2020. The NFCs’ debt amounted to 84.9% while total household liabilities 
totalled 62.5% in terms of GDP. Both NFC and household debt ratios are significantly lower than those 
recorded prior to the global financial crisis, and in line or slightly below the euro area average. However, 
according to the Commission estimates, debt to GDP ratios of both NFCs and households remained above 
prudential  levels  and  fundamental-based  benchmarks  (Graph  3.1).  Notably,  the  NFC  debt  level  stands 
about 30 pps and 25 pps above the prudential threshold and the fundamental benchmark, respectively. 

Graph 3.1: 

Thematic Graphs: Private debt 

Source: European Commission Services 

Policy measures support borrowers and corporates  

The Spanish authorities have implemented several measures to support borrowers and corporates 
since  the  beginning  of  the  COVID-19  pandemic.  The  subsequent  legislative  and  non-legislative 
payment  moratoria  adopted  between  March  and  July  2020  have  played  a  crucial  role  in  providing  a 
temporary  breathing  space  for  borrowers  and  their  banks.  Such  loan  moratoria  have  recently  been 
extended  as  the  deadline  for  borrowers  to  apply  for  both  legislative  and  non-legislative  moratoria  has 
been  set  to  31  March  2021.  In  addition,  two  public  guarantee  programs  managed  by  the  public 
development  bank  (Instituto  de  Crédito  Oficial,  ICO)  to  cover  liquidity  and  investment  needs  for 
corporations and self-employed individuals, as well as specific measures relating to the tourism sector and 
the public transport of goods were deployed. Such guarantee programs have been extensively used by the 
corporate sector as according to ICO, bank funding backed by government guarantees represented around 
40% of total new loans to non-financial corporations between April and December 2020. This percentage 
reached 60% in the case of SMEs.  

16 

020406080100120140030507091113151719% of GDP(a) Fundamental-based and prudential benchmarks and NFC debt  NFC debt, consolidated,  % of GDPFundamentals-based benchmark, % of GDPPrudential benchmark, % of GDP01020304050607080909899000102030405060708091011121314151617181920% of GDP(b) Fundamental-based and prudential benchmarks and HH debt Household debt, %GDPFundamentals-based benchmark, household debtPrudential benchmark, household debt 
 
3. Thematic Issue: Private Debt 

Throughout  the  first  quarter  of  2021,  Spain  has  put  forward  an  additional  package  of  measures 
aimed at further supporting the flow of credit to the economy. On 12 March, the government adopted 
new  measures  amounting  to  EUR  11  billion  to  help  viable  corporations  whose  financial  situation  has 
deteriorated as a result of the COVID-19 pandemic. This amount is broken down into EUR 7 billion for 
non-reimbursable aid to self-employed and firms in these sectors, EUR 3 billion to restructure the state-
guaranteed  loans  granted  by  ICO  and  EUR  1  billion  for  a  Recapitalisation  Fund.  The  Bank  of  Spain 
recently  indicated  the  need  for  sustained  support  to  the  corporate  sector,  which  under  the  baseline 
scenario  is  estimated  to  be  between  11bn  and  20bn  and  susceptible  to  sizeable  increase  if  worse-than 
projected macroeconomic conditions materialise.  

Going forward, private debt developments may be less favourable than in recent years 

Moving  forward  it  will  be  vital  to  assess  how  firms  will  be  emerging  from  the  crisis.  Excessive 
corporate  indebtedness  could  hamper  investment  in  the  coming  years  or  lead  to  insolvency  situations 
affecting  those  corporates  particularly  stressed  by  the  impact  of  the  COVID-19  pandemic.  Against  this 
backdrop, the value of public guarantees have registered a sizeable increase, thereby accentuating the risk 
related to the materialisation of contingent liabilities, which shall be closely monitored in the near future, 
especially  if  macroeconomic  fundamentals  turn  out  being  weaker  than  predicted  under  the  current 
baseline scenario. 

On the back of the government support schemes granted to mitigate the impact of the COVID-19 
pandemic, banks have increased lending to the economy. Lending to the private sector turned positive 
in April 2020 – for the first time since April 2011. Total lending to the private sector (excluding interbank 
lending)  increased  by  3.2%  y-o-y  in  December  2020.  Credit  activity  has  been  mainly  supported  by  the 
expansion  of  lending  to  non-financial  corporations,  which  went  up  by  8.4  %  y-o-y  in  December  2020. 
This was the highest growth rate registered since lending to corporates entered again positive territory in 
April 2020. This development has been driven to a large extent by new loans to corporates (Graph 3.3.d). 
A  significant  share of these  new  loans  granted to corporates are backed by  guarantees of the ICO. The 
loans guaranteed by ICO made up roughly 40% of total new loans granted to corporates between April 
and  December  2020.  In  contrast  to  lending  to  corporates,  lending  to  households  has  continued  on  the 
downward trend observed since June 2019 (Table 3.2). Lending to households decreased by 1.2% y-o-y 
in December 2020, in a context of a substantial increase of the household savings rate (Table 3.2). 

The  rebound  in  lending  fostered  by  the  public  support  schemes  also  reversed  the  deleveraging 
trend in the banking sector observed since 2012. The domestic assets of Spanish banks increased by 
10% in February 2021 compared with February 2020, reaching EUR 2.05 trillion. Meanwhile, the total 
assets of the Spanish banking sector (including the assets of foreign subsidiaries and branches) perked up 
by  5.9%  to  EUR  2.89  trillion  during  the  same  period.  The  total  volume  of  loans  increased  during  this 
same  period  by  EUR  156  billion,  out  of  which  roughly  EUR  120.8  billion  are  loans  guaranteed  by  the 
ICO (2). For the first quarter of 2021, Spanish banks expect credit standards to tighten further for loans to 
non-financial corporations, while remaining unchanged for loans to households. 

The  pace  of  NPL  reduction  has  significantly  slowed  down  and  NPLs  may  start  to  increase  again 
once  support  measures will  be phased out.  Yet, thanks to borrower relief  measures coupled  with the 
public guarantee schemes, which have prevented a deterioration in asset quality, the NPL ratio at system 
level  decreased  to  4.6%  at  the  end  of  2020,  down  from  4.8%  reported  at  end-2019.  From  a  sectoral 
breakdown, the construction sector emerged as the area displaying the highest, although declining, share 
of NPLs. Real estate activities and productive activities have also followed on a downward path,  while 
loans to households have registered the lowest level of impairment, with a NPL ratio of 4.3% at the end of 
September 2020. In addition, similarly to other banking sector across the EU, Spanish banks reported a 
marked increase in Stage 2 loans (according to IFRS 9) in the second half of 2020. According to the latest 
data published by the European Banking Authority (EBA), the share of loans classified as Stage 2 in the 
total loans covered by EBA-compliant moratoria went up to 26% at the end of 2020, 10 p.p higher than at 
end  of  June  2020.  The  loan  moratoria  have  alleviated  the  impact  of  the  COVID-19  pandemic  on  both 
banks and borrowers, in particular the most vulnerable ones. However, although no significant cliff edge 
effects  are  expected  when  moratoria  expire,  a  more  marked  deterioration  in  asset  quality  is  likely  to 
emerge in 2022. 

17 

3. Thematic Issue: Private Debt 

The COVID-19 crisis moderated house price growth  

The  lockdown  measures  weighed  on  activity  and  prices  in  the  housing  market,  with  a 
heterogeneous  impact  in  local  rental  markets.  Until  end-2019,  house  prices  had  been  on  an  upward 
path  for  six  years  and  the  valuation  gap  was  closing  at  the  national  level,  yet  with  considerable 
divergences across regions (Table 3.3). The lengthy stoppage to economic activity in the first quarter of 
2021 accentuated the setback of investment in housing and the slowdown in property prices experienced 
in the fourth quarter of 2020, when the growth rate fell to 1.5% y-o-y, the lowest since the first quarter of 
2015  (Graph  3.3.c).  The  drop  in  dwelling  prices  going  into  the  first  quarter  of  2021  has  been  more 
pronounced  in  the  second-hand  segment  as  demand  for  new  properties  showed  greater  dynamism, 
possibly reflecting a shift in household preferences arising as a result of the COVID-19 pandemic.  

Graph 3.2: 

Bank loans to households by type 

Source: ECB BSI 

The latest Bank Lending Survey reported a slight tightening of credit standards for housing loans 
to households, despite the fact that the average interest rate on mortgages constituted on dwellings over 
the first months of 2021, set to 2.5%, was in line with the last quarter of 2020. This reflects primarily the 
perception by banks of a deteriorating general economic outlook and the increasing borrowers’ credit risk. 
It also noted a modest decline in demand for housing, which is projected to reverse in the second quarter. 
In addition, within this scenario, the reduced financing cost associated with the prospect of a  prolonged 
looser monetary policy in the euro area could make housing investment more attractive and affordable for 
households and investors, thereby accelerating the recovery of the housing sector.   

The slowdown to economic activity in 2020 exacerbated housing supply constraints, adding a source 
of  upward  pressure  on  prices.  Furthermore,  the  gradual  pick  up  of  tourism-related  activities  could 
contribute  to  lifting  prices  for  the  remainder  of  2021,  particularly  in  those  areas  where  holiday 
accommodation  constitutes  an  important  driver  of  residential  properties.  A  rebound  of  activity  in  the 
housing  market  is  therefore  expected  when  the  current  containment  measures  are  eased  and  pent-up 
demand built during lockdown period is absorbed. Such momentum could be spurred in response to more 
favourable future income expectations of households, now undermined by a weak labour market outlook, 
despite the income support measures put in place by the government.  

18 

01020304050607006070809101112131415161718192021*% of GDPLoans for house purchaseLoans for consumptionLoans for house purchase,EALoans for consumption,EA  
 
Graph 3.3: 

Thematic Graphs: Private debt 

3. Thematic Issue: Private Debt 

Source: European Commission Services 

19 

-8-6-4-20246051015202504060810121416182022'y-o-y                  % change%(a) Household saving rateGross household saving rate Euro Area 19 (lhs)Gross household saving rate Spain (lhs)Real adj. gross disposable income Spain (y-o-y %) (rhs)Source: Eurostat-30-20-100102030405060708008Q209Q210Q211Q212Q213Q214Q215Q216Q217Q218Q219Q220Q221Q2(b) Credit supply conditions for non financial corporationsbanks' risk tolerance (from 2015)risk perceptionscompetitioncost of funds and balance sheet constraintsActualTighteningEasingSource: ECB bank lending survey020406080100120140160180-10-505101520253006Q207Q208Q209Q210Q211Q212Q213Q214Q215Q216Q217Q218Q219Q220Q22015=100Rate of change y-o-y (%)(c) House prices and mortgage credit growthMFI loans for house purchase (y-o-y growth rate)Real House Price Index (2015=100), right axisNominal House Price Index (2015=100), right axisSource:ECB Bank Lending Survey-15-10-50510152009Q110Q111Q112Q113Q114Q115Q116Q117Q118Q119Q120Q121Q1% of GDP (over last 4 quarters)(d) Bank loans to non financial corporations (net flows) domestic NFC loansdomestic corporate bondsSource: ECB BSI    
 
 
 
 
 
 
 
 
 
Table 3.1: 

Non-financial corporations debt indicators, Spain 

3. Thematic Issue: Private Debt 

(f) European Commission forecast. (1) Benchmarks for flows (% of GDP) are estimated on the basis of non-consolidated flows. 
(2) Gross non-performing bank loans and advances to Households and non profit institutions serving households (% of total 
gross bank loans and advances to Households and non profit institutions serving households). (3)  Quarterly data is 
annualized. 
Source: (a) Eurostat, (b) Ameco, (c) European Commission calculations, (d) ECB 

Table 3.2: 

Household Debt Indicators, Spain 

(f) European Commission forecast. (1) Benchmarks for flows (% of GDP) are estimated on the basis of non-consolidated flows. 
(2) Gross non-performing bank loans and advances to Households and non profit institutions serving households (% of total 
gross bank loans and advances to Households and non profit institutions serving households). (3)  Quarterly data is annualized 
Source: (a) Eurostat, (b) Ameco, (c) European Commission calculations, (d) ECB 

20 

2003-072008-122013-17201920202021f|20Q220Q320Q4SourceStocksDebt, consolidated (% of GDP)(a,d)89115867385|808285Debt, consolidated (% of potential GDP)(a,b,d)91110837477|777677Prudential threshold (% of GDP)(1)(c)605756595656|Fundamental benchmark (% of GDP)(1)(c)404955526057|Debt, consolidated (% of gross operating surplus)(a,b,d)432485362299376|341356376Interest paid (% of gross operating surplus) (3)(a,b)17.715.86.33.8|2.73.7Debt, consolidated (% of gross financial assets)(a,d)1191371008585|Domestic  loans in forex (% dom. Loans)(d)1.41.21.72.11.7|1.81.71.7FlowsCredit flows (transactions, % of GDP) (2)(a)14.6-0.3-1.51.14.60.4|13.8-0.31.4Benchmark for flows (% of GDP)(1)(c)|Investment (% of value added)(b)28.721.324.527.227.028.0|Savings (% of value added)(b)21.529.735.235.534.635.1|p.m. Banks NFC NPLs (% of NFC loans)(2)(d)10.84.7|2003-072008-122013-17201920202021f|20Q220Q320Q4SourceStocksDebt, consolidated (% of GDP)(a,d)7083675763|606163Debt, consolidated (% of potential GDP)(a,b,d)7280645857|585757Prudential threshold (% of GDP)(1)(c)484239423940|Fundamental benchmark (% of GDP)(1)(c)354849445148|Debt (% of gross disposable income)(a,b,d)1111301079395|949495Interest paid (% of gross disposable income) (3)(a,b)3.13.41.10.6|0.20.7Debt (% of gross financial assets)(a,d)40.749.134.129.729.9|30.330.429.9Share of variable rate loans for house purchase (%)(d)88.685.654.235.834.5|Domestic  loans in forex (% of dom. loans)(d)0.31.10.70.50.4|FlowsCredit flows (transactions, % of GDP) (4)(a)10.7-0.4-1.60.1-0.4-0.1|2.1-2.80.4Benchmark for flows (% of GDP)(c)4.22.30.00.70.80.7|Savings rate (% gross disposable income)(b)8.39.06.76.314.811.1|Investment rate (% gross disposable income)(b)15.39.94.95.64.95.2|p.m. Bank HH NPLs (% of HH loans)(2)(d)4.6| 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
   
 
Table 3.3: 

Selected housing indicators, Spain 

3. Thematic Issue: Private Debt 

Forecast. The forecast of house prices is computed on the basis a housing valuation model shared with Member States in the 
context of the EPC LIME working group. The forecasts represent real house price percentage changes expected based on 
economic fundamentals (population, disposable income forecast, housing stock, long-term interest rate, and the price 
deflator of private final consumption expenditure), as well as the error correction term summarising the adjustment of prices 
towards their long-run relation with fundamentals. The source for the forecast of other variables is Ameco. 
(1) Price to income in level is the number of years of income necessary to buy an assumed 100m2 dwelling. See Bricongne, J-
C, A Turrini, and P Pontuch, 2019, “Assessing House Prices: Insights from HouseLev, a Dataset of Price Level Estimates”, 
Discussion Paper 101, European Commission, available in ""https://ec.europa.eu/info/publications/assessing-house-prices-
insights-houselev-dataset-price-level-estimates_en"".  
(2) Price to income and price to rent gaps are measured in deviation to the long term average (from 1995 to the latest 
available year).  
(3) The model valuation gap is estimated in a cointegration framework with nominal house prices as the dependent variable 
and five fundamental explanatory variables:  total population, real housing stock, real disposable income per capita, real 
long-term interest rate and price deflator of final consumption expenditure. See Philiponnet and Turrini, Assessing House Price 
Developments in the EU (2017) available in ""https://ec.europa.eu/info/publications/economy-finance/assessing-house-price-
developments-eu_en"" and revision notes presented to LIME in October 2019 and June 2020.  
(4) The average house price gap is the simple average of the price-to-inome, price-to-rent and model valuation gaps. 
Source: (a) Eurostat, (b) Eurostat, OECD, ECB, BIS, Ameco, national sources, European Commission calculations, (c) European 
Commission calculations, (d) ECB, Ameco (e) Ameco (f) ECB 

21 

2003-072008-122013-1720182019202020Q120Q220Q320Q4House price developmentsUnitSourceReal house price, yoy growth%(a)10.5-8.10.65.24.12.02.32.11.92.1Nominal house price, yoy growth%(a)14.2-6.41.16.75.22.23.32.21.81.7Price to income in level (1)years(b)12.712.69.910.711.011.412.010.912.310.6Valuation gapsPrice to income gap (2)%(c)19.118.6-6.70.43.77.44.66.89.48.8Price to rent gap (2)%(c)24.515.1-11.02.86.57.75.77.39.38.5Model valuation gap (3)%(c)20.110.2-7.38.811.59.98.99.611.110.1Average house price gap (4)%(c)21.214.7-8.34.07.28.36.47.910.09.1Housing creditMortgages (% GDP)%(d)46.961.051.943.141.044.9Mortgages, yoy growth%(d)23.40.3-3.8-0.6-1.5-1.3Housing supplyResidential construction - dwellings  (% GDP)%(e)11.16.94.35.45.75.5Residential construction - dwellings, yoy growth%(e)4.3-11.84.312.44.1-16.6Non-residential construction (% GDP)%(e)8.56.84.54.34.24.3Value added in the construction sector, yoy growth%(e)2.7-9.5-0.14.14.3-14.5Building permits, yoy growth%(a)10.0-35.93.524.212.8-37.0Number of transactions, yoy change%(f)-0.1-13.88.9Other housing market indicatosShare of owner-occupiers, with mortgage or loan%(a)32.032.831.129.428.4