The economic climate

The GDP in real terms grew by 2.6% in 2018, almost half a point less than the previous year. The trend within the year, in year-on-year terms, was downwards after the relatively stable growth observed in 2017. Total employment, measured by the number of full-time equivalent employees, followed a similar trend, albeit with a slight upturn at the end of the year, and closed 2018 with an increase of 2.5% compared to 2.9% in 2017. The slowdown in activity is mainly explained by the evolution of external demand, which subtracted four-tenths from growth.

The current situation indicators that are constructed from the information declared to the AEAT by taxpayers are abundant in the previous diagnosis. The calendar-adjusted and deflated sales of Large Non-Financial Companies grew by 3% in 2018, seven-tenths less than in 2017. In the first quarter of 2018, growth remained close to that of the end of the previous year, but from the second quarter onwards the slowdown became more pronounced. Domestic sales also showed moderation, although less intense, and it was in foreign sales where the slowdown was most noticeable: In the first half of the year, growth was relatively stable at around 5%, while in the second half of the year growth fell by around 2 points.

Another indicator of fiscal origin is the number of recipients of work income in Large Companies , which approximates the evolution of salaried employment. In 2018, it grew by 3.1%, half a point below the increase estimated for 2017, thus continuing the downward trend that this variable has followed since mid-2017. 

Likewise, the number of Social Security affiliates increased below the previous record (3.1% in 2018 and 3.6% in 2017) and with a profile consistent with the rest of the real indicators: slight slowdown at the beginning of the year and deeper as the year progressed.

For the analysis of income, the variables that must be taken into account are the nominal ones, which include the effect of prices . In 2018, these grew at a similar rate to that of 2017. In general, all indicators showed growth close to that of the previous year, particularly those related to consumption. This is the case of the deflator of household final consumption expenditure (1.6% in 2018, the same as in 2017) and of the CPI, both in the general index (1.7% and 2%, respectively) and in the index calculated without unprocessed food or energy products, which grew two tenths less than in 2017. Within the year, as happened in 2017, the evolution of prices was marked by the behavior of energy products. In 2017, these prices rose in the first half of the year and then eased off; In 2018, however, the increases were concentrated in the second half of the year. On average, the annual increase over the two years was, as in the rest of the indicators, approximately the same.

The macroeconomic aggregates most closely related to the evolution of income are domestic demand at current prices and compensation of employees .  Domestic demand grew by 4.5% in 2018, a slowdown of two-tenths compared to 2017, slightly lower than that shown by real GDP. Salaried workers' compensation increased by six-tenths more than in 2017, to 4.1%. In an environment of more moderate employment growth, the increase in remuneration is explained by the rise in average wages, which, after years of stagnation, began to recover at the end of 2017 and was consolidated in 2018, especially after the increase in public salaries approved in the middle of the year together with the Budgets.