After two summers characterized by restrictions on mobility and the mandatory use of masks even on the beaches, the Spanish have decided to prioritize their vacations this year 2022 ahead of other expenses. This is attested to by an analysis article released this Tuesday by the Bank of Spain based on information from the European Central Bank's Consumer Expectations Survey (CES), which reveals that holiday spending is practically the only item that has not been resentful of the family budget after the attempted Russian invasion of Ukraine that began last March.
The information referring to Spanish consumers testifies that, contrary to what has been observed in other spending items, "the outlook for spending on vacations has continued to recover" after the outbreak of the war, with the sole exception of the lowest incomes which, according to the analysis of the Bank of Spain, "has less room for maneuver to absorb a rebound in prices by reducing its savings levels."
The tactical shielding of spending reserved for holidays does not mean that Spanish households are not adapting to a context marked by the exponential growth of their spending as a result of inflation. The Bank of Spain detects, in fact, that since last March the consumers have activated the 'crisis mode' in the heat of the worsening of their expectations and not only about the increase in prices but also about the future evolution of their income, their patrimonial situation and the general economic situation.
Analysts from the institution governed by Pablo Hernández de Cos confirm that the war in Ukraine put an end to the trend of recovery in consumption that had been observed in previous months and has opened a stage of significant reduction in household spending. which will have an impact on the evolution of the economy.
It is their natural response to a horizon in which they foresee that price pressure will continue for several years and that inflation will be at levels of 3% even in 2025, and in which they also sense that their wages will not grow in the same proportion and that, therefore, they will be forced to draw on the savings accumulated during the pandemic to meet their structural expenses. The other part of the crisis strategy that is perceived in the survey carried out on Spanish consumers by the ECB is the reduction of less necessary expenses in luxury goods or durable goods, such as household items, electrical appliances or automobiles.
The Bank of Spain warns that the most complicated situation will occur in households that barely have savings mattresses and that are being forced to reduce their spending on basic goods to face, for example, the increase in electricity bills . The conclusion of the institution's report is that the vast majority of Spanish households have adapted to the rise in electricity bills without addressing substantial changes in their spending patterns, with the sole exception of the lowest incomes, where they do observe a cut in spending on other items.