Spain | The cyclical position of the Spanish economy during the COVID-19 crisis

This Economic Watch assesses the structural shocks that explain the cyclical behavior of the Spanish economy during the COVID-19 crisis. For this purpose, we use information from the latest forecasts from BBVA Research (2020) which are exogenous to the model.

Key points

• Key points:
• We provide an estimate of the main structural shocks that have affected GDP growth per person of working age in 2019 and 1Q20, and those that will affect the remaining three quarters of 2020.
• The fall in GDP per person of working age as a result of COVID-19 is without historical parallel.
• Over 2020 as a whole, supply and demand factors would have a comparable weight, although performing differently depending on the quarter.
• Among demand factors, the negative contribution of private consumption and housing demand shocks in 2Q20 reduce GDP by 12 percentage points.
• The most significant highlight of the expected performance of the unemployment rate during the COVID-19 crisis is that it may increase only slightly, in comparison to other crises, taking into account the magnitude of the cumulative fall in GDP in the first half of 2020.

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