Spain Economic Outlook. Third Quarter 2020

The Spanish economy could contract by 11.5% in 2020 and grow by 7% in 2021. The drop in activity could exceed 20% in 1H20. However, the easing of restrictions has allowed the recovery to begin. GDP could increase by 10% quarter on quarter in 3Q20.

Key points

• Key points:
• The global outlook is conditioned by the evolution of the Covid-19 pandemic, which has responded to different health policy strategies, so far with more success so far in Asia and Europe. Global growth is revised downwards from -2.4% to -3.2%.
• The fall in GDP in Spain is revised downwards to 11.5% in 2020 mainly due to the prolongation of containment measures and the greater impact of restrictions on demand.
• The impact of the crisis, in addition to being significant, has been heterogeneous and different as observed in 2008: it has affected more "social consumption" sectors (construction is not the trigger), to autonomous communities with greater exposure to them, to young people, and proportionally more to women and foreigners.
• The recovery is underway as a result of the easing of restrictions and economic policy actions to support demand.
• Risks remain skewed downwards, in an environment of still high uncertainty, but some factors are beginning to emerge that, in the absence of major shocks, could accelerate the recovery

Authors

Geographies

Topics

Tags