Page 92 - MEDIASET ESPAÑA / 2012. Financial Statements, Management and Corporate Governance Report

92
MEDIASET ESPAÑA COMUNICACIÓN, S.A.
THE SPANISH ECONOMY IN 2012
Data on the Spanish economy available at the date of authorization for issue of these financial statements indicates
that, without a doubt, last year was one of worst since the global economic crisis began five years ago.The prolonged
recession has hit our production model hard since 2008, which is indicative of the daunting economic environment in
which we competed economically during 2012.
Viewed from a global perspective, from the start of 2012 it became clear that the hoped-for economic recovery was
still not imminent; in fact, it soon became evident that the Chinese economy was showing signs of slowing down as
compared to its previous high growth rates. Other developed economies were still far from getting back on the road to
long-lasting growth for two main reasons: the US did not meet growth rates projected during the final quarter of 2011,
while the dire situation of the European economy was pulled further down by peripheral countries which entered into
a recession the first part of 2012.
Since then, all these economies (excepting China, whose growth seems to have received a push in recent months) have
worsened, to the extent that the German and US GDPs, traditionally the motor of the global economy, entered into
the red towards the end of the year.This panorama excludes Latin America: although in 2012 certain countries did not
grow as much as projected (no doubt due to the fact their economies are warming up), the forecasted overall GDP is
under 3%, which, while not exactly spectacular, can be considered sound.
Data for Spain available at the at the date of authorization for issue of these financial statements indicate that the
GDP fell 1.8% overall during the year: it is quite significant that the fourth quarter was the year’s worst (-0.7%), which
seems to corroborate that the end is not in sight, and that some time will have to pass until the recession ends and
the economy begins to reflect growth, however slight. Evidently, the contraction of the GDP during the year has led to
an intense destruction of jobs, causing unemployment to reach 26.1% of the current active population at the date of
preparation of these financial statements; thus, approximately 5 million people are unemployed.
Austerity measures (which were nearly inevitable) instrumented by the government were a leading cause of the
contraction of the Spanish economy during 2012; they have had a significant impact on internal demand as well as
private consumption. These measures include: a rise in Personal Income Tax at the beginning of the year, increase VAT
as of September 1, as well as other austerity initiatives having an impact on the expenditures and investments made by
public administrations.
Economic forecasts for 2013 indicate that the economy will remain stagnant, as certain key public and private sector
employment adjustments will still be pending, which will have the inevitable effect on internal demand that has been
greatly affected by shrinking public budgets. However, as of the third quarter of the year, a weak growth might be noted
once all the current economic adjustments underway have begun to take effect.
The huge efforts and sacrifices made regarding economic policies as well as the restructuring of important sectors,
especially the financial, have led to improved productivity as well as a reversal of Spain’s trade deficit; thus, at the end
of 2012, it reached a balance and headed towards a surplus. Net capital flow during the first part of 2012 was fluid,
to then reverse during the second half, demonstrating the increasing confidence of foreign investors in the Spanish
economy.This has pushed risk premiums for Spanish public debt downwards, with a public and private degearing process
which is crucial, and without which it would not be possible to get back on the road to recovery. Against this backdrop,
encouraging news has begun to emerge regarding financial markets as well as Spain’s competitive edge, but has yet
MANAGEMENT REPORT FORTHEYEAR ENDED
AT 31 DECEMBER 2012
EXPRESADO EN MILES DE EUROS