As expected, the 4% quarterly contraction in the Spanish economy estimated by the consensus of analysts has been overtaken by reality. GDP registered a historical collapse of 5.2% in the first quarter due to the Covid-19 crisis. Until now, the biggest quarterly fall in GDP was in the first quarter of 2009 (-2.6%).
Starting next Monday May 4, the plan contemplates 4 phases, each with a duration of two weeks. The mere announcement of the deconfinement plan is being taken as synonymous with the worst being behind Spain. That said, it has generated certain doubts. For example, the conditions imposed in the initial phases will make it economically unviable to for many businesses to re-open, particularly those linked to the hotel and tourism sector.
Funcas | The sectors most directly affected by the shutdown – retail, hotel accommodation, restaurants, cultural and sporting activities and personal services – account for 15% of GDP alone. And they also have a ‘snowball effect’ on the rest of the sectors equivalent to 6% of GDP, according to our forecasts’ update for 2020 and 2021.
A glimmer of hope in the macro scenario managed by Banco Santander’s Research team. Compared to more somber estimates such as those from the Bank of Spain or BBVA Research, the experts at Santander Corporate & Investment do believe in a V-shaped recovery.Banco Santander’s base scenario envisages a 5.2% fall in Spanish GDP this year compared with 8.3% growth in 2021.
Alicia Arce | Enlightenment is the human being’s emergence from his self-incurred minority, said Kant and that produced an active subject who is responsible, who takes charge of their life, their acts, their share of the world; with their many achievements and their terrible atrocities.
Caixabank Research | A fall in the price of oil provides a boost to the economy of countries that are net importers of crude oil, as is the case for Spain. Cheaper oil equates to an increase in the real disposable income of households, such that it also supports aggregate consumption. However, the health crisis that has gripped us following the COVID-19 outbreak will result in this boost derived from a lower oil price not being reflected in the economy, at least for the time being.
Intermoney | The Bank of Spain has proposed different macroeconomic scenarios for Spain deriving from COVID-19. From the supply side perspective, the institution offers three scenarios that would lead to severe or very severe falls in GDP in 2020: scenario 1, -6.6% (8-week lockdown and almost complete normalisation after lockdown), scenario 2, -8.7% (8-week lockdown and almost complete normalisation in Q4’20 ) and scenario 3, -13.6% (12-week lockdown and incomplete normalisation by year-end, particularly in the segments of the economy linked to the hotel and leisure industry).
A.J.A. | It is a common misunderstanding, typical of young people, to think that the greatness of democracy lies in the fact that we can choose who governs us. No. Its greatness lies in the fact that it gives us the chance to boot out the incompetent Government that has governed us for the last four years. Be it a PP Government, be it a PSOE Government. That’s what people in Venezuela, Cuba, or in China can’t do.
Bankia Estudios | One of the Spanish economy’s strengths with which to face the devastating crisis unleashed by Covid-19, compared to the previous financial crisis of 2008-13, is the private sector’s healthier starting position. In this respect, families and companies’ consolidated debt stood at 129.7% of GDP at end-2019, the lowest figure in 16 years and 63.5 percentage points below the 2007 level. Corporate debt also falls to a low of 16 years in GDP terms (72.8% vs the previous 75.1%).
The yearly rate of inflation dropped by seven-tenths of a percentage point in March to 0%, after a monthly decline of 0.4%. The result was very close to expectations, and was mainly thanks to the fall in energy products due to the oil price collapse. The main deviation occurred in unprocessed foods’ prices which were inflated due to the increase in fresh fish, vegetables and pulses.