The challenges for the Spanish economy in overcoming COVID-19

Summary

The recession in 2020 is inevitable. It is highly likely that Spain's GDP will fall by between 6 and 10% in 2020. And a rebound in 2021 will not be sufficient to recover the losses that have occurred during the crisis. To add to an already bleak outlook, risks are on the downside.

Key points

• Key points:
• Our baseline scenario for 2020 assumes that the average use of productive capacity in the economy was 80% in the weeks of less strict confinement and 60% in the first two weeks of April.
• Helping companies survive and restart their business as soon as possible is vital to maintaining the organizational capital and employment levels necessary for recovery.
• Looking beyond their short-term benefits, demand and incomes policies will not be sufficient in the medium and long term to remedy the aftermath of this crisis.

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