Spain | Trends that will stay

Summary

Bill Gates is credited with the saying that short-term impact of technology is often overestimated but its long-term effects are underestimated. The pandemic isn´t the same as a technological change but it has had disruptive consequences,and going forward it´s unknown how long we´ll continue to feel the impact of all these.

Key points

• Key points:
• The decline in tourism (along with the hospitality sector) may be the most important change that Spain's economic structure has experienced in a decade. It is somewhat different from the "resizing" that has been seen in the construction sector.
• A second trend observed in 2020 has been the increase in household savings rates. This can partly be explained by the rise in uncertainty. Another explanation is linked to factors such as fear of catching the virus or a direct result of restrictions on mobility and premises being able to open, in order to help prevent people from coming into contact with one another.
• A third explanation relates to the reduced correlation between employment and GDP growth. Despite around an 11% reduction in economic activity this year, the number of job losses will be under 3%.
• Now that we are considering using funds from the Next Generation EU (NGEU) as well as looking at reforms that could improve our output capacity, it would be good to think about how they could help transform the tourism sector.
• We will also need to support those workers having to migrate to other sectors, reduce uncertainty about contingent liabilities in the public sector, help facilitate companies' financial restructuring and rebuild our labor market by factoring in our existing best practices.

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