Is Spain really as far from the United States as we think?

Summary

Despite the fact that is less exposed to the US economy than the rest of the Economic and Monetary Union (EMU), Spain will still benefit from expansionary policy in the United States. BBVA Research believes that this impact will grow and add around 0.2 pp to GDP growth in 2021 and 0.8 pp in 2022.

Key points

• Key points:
• Whether Spain can benefit from the historic fiscal stimulus being rolled out in the United States will depend on the ability of the sectors most exposed to the US economy to take advantage of the pull effect.
• Rather than through direct links, it could emerge that the greatest benefit for Spanish companies lies in the indirect impact of the change in American fiscal policy.
• Despite efforts made in recent years to diversify destinations, exports to the United States only accounted for 1.8% of Spain's GDP in 2019, compared to 4.3% of the GDP of the EMU.
• A preliminary analysis would appear to suggest that Spain may be among the Eurozone countries that will benefit least from fiscal expansion in the United States.
• The most important boost to the Spanish economy may, in any case, come through indirect channels. If the United States gives the EMU a boost, Spain will also benefit through the integration of our companies into production chains in other countries and through the improvement in growth prospects domestically.

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