Spain Economic Outlook. First quarter 2020

Summary

The slowdown of the Spanish economy could end in 2020. GDP growth will slow down to 1.6% in 2020, from 1.9% in 2019, and show a moderate acceleration in 2021 to 1.9% due to the slight improvement expected in the European economy

Key points

• Key points:
• The way is paved for a stabilization of global growth as a result of reduced trade tensions between the US and China, lower uncertainty about brexit and the effect of monetary accommodation
• The slowdown in the Spanish economy could be stopped by 2020. The evolution of domestic expenditure and the export industry could have reached a turning point, while fiscal policy would be pro-cyclical
• The potential growth of the Spanish economy would be converging to lower levels than those observed at the beginning of the century. It is necessary to implement reforms that will increase the growth capacity, foster a favourable environment for investment and help reduce the main imbalances
• The scenario continues to be biased downwards. Its evolution will depend on the resolution of the various sources of uncertainty and on the policies implemented

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