The Strategist

Spain Benefits From Lower Oil Prices

09/04/2015 - 16:22

The decline in oil prices has a positive impact on the economy of Spain, as long as it is protected from the weakening of the Chinese economy (that is one of the reasons for the oil market decline), said Spanish Finance Minister Luis de Guindos.
In an interview with Bloomberg, he noted that the decline in energy prices for individuals and for companies has been supporting the growth of the Spanish economy this year.

Spanish GDP in the II quarter rose by 1%, the growth rate exceeded the overall euro zone (0.3%) more than three times.

- We import most of the raw materials, especially energy carriers - Guindos said. - So Spain is in a winning situation.

According to the forecast of the Spanish Government, the country's economy will grow by 3.3% in 2015 due to low energy prices close to record low interest rates, as well as weakening Euro.

The fall in oil prices suggests savings of about 10 billion euros, which means an increase in disposable income of homeowners and reduced costs for companies, Guindos said.

According to him, the weakening of economic growth in China has no direct impact on the economy of Spain, as China's share of Spanish exports accounts for only 2%.

However Guindos noted a risk of contagion to other emerging markets and the global economy as a whole, which could negatively impact on Spain.

- The slowdown in the Chinese economy will spread to other developing countries, particularly Latin America, which will be important for Spain, - the minister said.


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