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J. R. Pin Arboledas, Professor, IESE, University of Navarra

Economic Easter

Mon, 11 Apr 2011 10:33:27 +0000 Published in The Economist

Next week will be significant religiously and economically: it is the starting signal for the tourist season. This year, it is a late Easter Week, the third in April; all the more reason to consider it the start of that season.

In that sense, its development can be significant. The news about the sector is flattering. The instability in the Arab world is expected to shift many foreigners to the mainland and the islands. If the forecasts are fulfilled, the unemployment will diminish from April to August; a respite for the economic managers.

If this Easter was weak, it would be necessary to analyze it. It could have been due to the weakness of foreign or domestic tourism; it would be serious if it were due to the latter. If Spaniards did not travel, it would be a sign that the deteriorated economic status is making a deep dent in families.

Two weeks ago, it was revealed that the family savings rate had dropped four points. Experts blamed this on the decline in the income available of Spaniards. Unemployment, the containment of salaries, the increase in inflation and the rise in taxes (VAT) have reduced the money to spend and this Easter could be noticed.

The data would be significant because the increase of work in tourist areas frequented by foreigners might not be enough to compensate for the sluggishness of domestic consumption. It would confirm the hypothesis that the exit of the crisis in Spain, and its firm recovery, will only occur thanks to the pull of foreign demand; selling abroad or to foreigners in our country via tourism.

Everything seems that this is what will happen. It is also possible that Spaniards, fed up with the pessimism, will choose to throw the house out of the window and create a mirage of growing domestic consumption. After all, the sun and the beach may be the escape for a desperate staff who decides that if we lose, we will go down the river, so? Let's wait for the numbers and analyze them. Although there is always a solution for this week: to pray. That's what processions are for.