- Retail Sales in Spain Plunge 10.9%, Largest Drop on Record; All Pain, No Gain!
In a seriously misguided effort to balance its budget, In early September Spain Passed Largest VAT Hike In History. I wrote at the time, “Stunning Ineptitude Will Make History Books“. Spain’s unemployment rate is over 25% and the youth unemployment rate is near 53% yet the fools in the Spanish government hiked taxes yet again, this time by the largest amount in history.
Spain’s handling of this economic implosion is sure to make the history books as a prime example of complete ignorance in how to deal with a fiscal crisis.
History in the Making
That prediction took a single month to pan out. Reuters reports Spain retail sales decimated by VAT hike.
Spanish retail sales fell at their fastest pace on record in September as already battered consumer confidence took another hit from a hike in value added tax, driving many shoppers to trade down to cheaper products.
Sales fell 10.9 percent year on year, Monday’s National Statistics Institute data showed, reflecting an economy struggling through its second recession in three years and plagued by chronically high unemployment.
The drop was the biggest in calendar-adjusted terms since current records began in January 2004, and marked the 27th monthly decline in a row.
“It’s clear there are no signs the crisis is abating,” economist at Nomura Silvio Peruzzo said. “The headline (retail) figures show a sharp drop and indicate that domestic demand is not going to be anywhere near what the government is anticipating.”
All Pain, No Gain