Spain | Consumption Outlook. Second half 2021

Sluggish purchases of durable goods have constrained the recovery of private consumption in 2021. The increase in household income, a more subdued inflation, the unwinding of excess savings and the boost from NGEU funds will push spending up to around 5.5% in 2022.

Key points

• Key points:
• Falling household purchasing power and bottlenecks have slowed consumption growth.
• Passenger car registrations will barely exceed 850,000 in 2021 due to supply constraints, declining disposable income and rising fuel prices, which have a greater impact on the population around the median income level.
• Despite the expected hike in car registration tax in January 2022, 1,000,000 passenger cars could be registered in 2022 if supply problems are solved in the first half of the year. If the restrictions are extended for the whole year, sales would fall short of 940,000.
• The electrification of transport has no turning back. The market share of electric cars will be around 14% in 2022, almost double that of 2021, driven by increasing demand, growing availability of models and the commitment of authorities. However, the gap to the European average is likely to remain.

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