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Coronavirus 17 Jun 2020

Consumption moves into positive territory with the partial easing of COVID-19 restrictions

According to last week’s data on credit and debit card spending, consumption has recovered in regions where pandemic restrictions have been lifted. This improvement is observed in the U.S., Turkey and Spain, and in recent days in Latin America. In Spain, increased spending has been seen in those regions that first moved into phase two of the country’s reopening. BBVA Research points out that there was also an increase in ATM cash withdrawals.

Every week during the COVID-19 pandemic, BBVA Research analyzes real-time credit/debit card spending trends in the countries that fall within the bank’s footprint. The first conclusion detailed in their latest report reveals “green shoots” in consumption during the first week of June in countries such as the U.S., thus confirming the upward trend of previous weeks. Turkey’s data also revealed a notable improvement, stimulated by Ramadan coming to a close and by the consequences of reopening measures. In Latin America, spending remained stable in Mexico, and for the time showed signs of recovery in Peru and Colombia.

Reopening, key to a spending rebound

In Spain, consumption has recovered generally across all sectors, which is explained by progress made in the country’s reopening process. It is worth noting that most of Spain’s regions that first moved from phase one to phase two have strengthened their hold on positive consumption. Many of those regions that entered phase two a week later have also moved into positive territory. 

This improvement, however, has still not been witnessed in large metropolitan areas like Madrid and Barcelona, which were both still in phase one of the reopening from June 1st through June 7th. BBVA Research expects to see an upward trend in these cities starting next week.

ATM cash withdrawals in Spain show a less positive trend: they continue to lag behind purchasing and the data is still negative compared to the weeks prior to lockdown. Nevertheless, Spain gained momentum last week, especially in those provinces that have been in phase two since May 25th.

Significant increase in restaurant spending

Another finding disclosed in the report is that spending on services such as restaurants saw significant improvement, coinciding with the easing of COVID restrictions in the European Union and the United States. Restaurant spend per country improved most notably in the U.S., Spain, and especially Turkey. There was slight improvement in Mexico, whereas in Argentina it improved dramatically.

Alongside catering and restaurants, the data once again demonstrated improved spending in transportation, especially in Turkey. Colombia stood out In Latin America for its figures in transportation spend.

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