Consumption is skyrocketing. Card purchases grew in July to be 28% above the level of spending on the same date in 2019, before the onslaught of the coronavirus, according to a study by BBVA Research published this Friday. And the cash withdrawal made up almost all of the lost ground, only three percentage points below the year before the pandemic. In the accumulated of both data, consumption rebounded strongly, 20%, thanks to the push of the summer season and national demand.
The main reasons for this impulse are two: the savings bagged during so many months of the pandemic and the arrival of the summer tourist campaign. The great bulwark is the consumption of Spaniards, which the sector clings to, although the spending of foreigners is recovering and is only 21% below the record marked in face-to-face spending with a card in the year prior to the coronavirus. A gap that is explained by a lower rate of arrivals, in the absence of the July data from the National Institute of Statistics being published.
In this way, the promising forecasts for the summer can be met, if nothing goes wrong along the way and the health emergency does not give another surprise, although it will only compensate for a part of the bad start to the year. The summer season, which is key, will be worse than that of 2019. There is no doubt about that, but at least it will give the Spanish economy a break if it greatly improves last year’s figures. “There is a change in the use of money and a step forward in digitization, but if it is added with the withdrawals of money, consumption is still above July before the covid. People are spending more, ”confirms Miguel Cardoso, chief economist at BBVA Research.
The increase largely revolves around accumulated savings, which go to certain products that consumers were unable to access for months. “People are spending their savings on what they stopped consuming a year ago: spending on services, mainly accommodation, bars and restaurants, leisure and entertainment,” adds Cardoso. In addition, according to the analysis of the study center, the trend at the end of the month was upward and in the last week there was a 33% growth in spending with bank cards.
This means that the acceleration is not over. In fact, this month comes key weeks for the summer tourism campaign, both for the national market and abroad. “The trend should continue in August because it is still the peak holiday season. Although it will depend on the safety of the people when spending, since most of the consumption is linked to tourism ”, emphasizes the chief economist of BBVA Research. The latest decision of the United Kingdom, which maintains that those vaccinated with a full schedule can travel to Spain without the need to quarantine upon their return, will also contribute to this vigorous growth.
Despite this string of good news, there are some shadows in the forecasts for the coming months. The main one, that this skyrocketing consumption is dedicated to services related to tourism. In other words, with the end of summer the push will fade. “The increase in spending may be temporary, because people who have been able to save and are spending that money want to use it in what they have not been able to do until now: go on vacation. Once that happens, it will not continue to consume the same, it will contain itself and will not continue using the accumulated savings “, says Cardoso, who believes that then it will be time for European funds:” When the summer push is over, it will be important that spending public and that the money of the funds arrives ”.
Therefore, the progress of the activity at high speed can be temporary. Even so, it will be remarkable and will facilitate the fulfillment of the Government and the House of Studies’ growth forecasts. In the case of BBVA Research, the estimate is that the Spanish economy will advance 6.5% in the year.
Regarding spending by sectors, the study shows that the activity with the worst performance is that of travel agencies, which are still highly affected by the coronavirus. This is because a good part of its billing depends on international destinations. Specifically, they are at 60% of the level of July 2019. Fashion activities (they are at 81%) and beauty (95%) do not equal the pre-crisis level in card spending.
On the contrary, among those who have had the best July, the category other services stands out, which almost triples the spending recorded on cards. It is followed by food (57% more than in July two years ago), bars and restaurants (+ 42%) and leisure (+ 36%). In addition, it is striking that the disbursement for both transport and accommodation has also exceeded the levels of the seventh month of 2019. It is minimal (8% and 2%, respectively), but it already represents a milestone given the difficult moment that the travel sector is still going through due to the blows of the coronavirus.
If the data is analyzed by province, face-to-face purchases grew in 50 of them. “The advance in spending was greater in some inland areas (Ávila, Segovia, Teruel and Huesca) and traditional tourist destinations (Cádiz and Girona). The rise in purchases with foreign cards in the Balearic Islands stood out, which exceeded the records of 2019 for the first time since the beginning of the health emergency, ”the study highlights. This data registered in the archipelago is especially significant and the fact that the expenditure of foreign visitors has recovered so strongly despite the restrictions still in place is an oxygen balloon. The tourist sector already glimpses the shore.