Pep Ruiz (BBVA Research) | The US economy’s stimulus plan, with a fiscal stimulus that can exceed 12 pp of US GDP, which could increase Spain’s GDP by 0.2 pp and 0.9 pp this year and next year respectively.
Scope Ratings | The government is prioritising growth over budgetary discipline, which for the moment is appropriate given the large output gap. Spain will run a wide budget deficit for some time. For 2021, the authorities forecast a deficit of 7.7% of GDP, which is based on a rather optimistic economic scenario. Thus, should growth be weaker than expected in the coming years, Spain’s public finances would deteriorate further – a risk captured with Scope’s Negative Outlook.
CaixaBank Research (Oriol Carreras Baquer and Javier García Arenas | We expect growth in economic activity to pick up in Q2, when the most vulnerable people should have been immunised and international travel can recover more strongly, with growth in the Spanish economy reaching around 6.0% in 2021. While the pace of recovery is high, this would still leave the economy 6.2% below the pre-crisis GDP level. In fact, we do not expect the economy to return to pre-crisis levels until 2023.
Economists are getting used to expecting the unexpected. The unprecedented fall in Spain’s GDP—seen during the first half of the year—was followed by one of the highest growth rates ever recorded. In the third quarter of the year, quarterly GDP growth was around 14%. The unusual extent of the growth seen during the recovery is mirrored by the atypical way in which it has taken shape. Growth is expected to return to more ‘normal’ levels in the fourth quarter, i.e. about 2%. While this rate is high in comparison with any quarter in Spain’s recent history, it indicates a sharp slowdown.
Intermoney | There are important reasons for maintaining a prudent attitude with regard to the Spanish economy, situating its full recovery in the year 2023. This would mean that we would lose more than a decade of the fledgling 21st century. On the other hand, there are also reasons to hope the recovery will eventually take shape and not be too far off. These include the encouraging development of the COVID-19 vaccines, the decisive response from the ECB and the EU, and a lesser impact of the crisis than feared on large European partners and customers.
Juan Pedro Marín Arrese | Spain faces dire prospects according to most estimates, as its crucial tourist sector is taking a heavy toll. Up to now,the Government has struggled to mitigate the ensuing onslaught on employment by financing temporary layoffs and supporting low-income households. Yet, GDP will plunge in 2020 and will probably display a sluggish rcovery in the following couple of years. Lower income levels and a substantial surge in unemployment will sharply cut down demand and output.
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.
Since the beginning of 2014, the Spanish economy has been recovering from a very tough crisis – unemployment jumped from 8% in 2008 to 26% at the start of 2014 and has now fallen to 18.9%. This is in part thanks to the ECB’s extremely expansionary monetary policy and low interest rates. Now after Donald Trump’s victory, everything could become unstable.
“With the recovery embedded we see greater scope for selective risk, taking on asset management in core locations while also considering opportunities in well connected edge of CBD overflow locations,” Deutsche AM Spanish Real Estate Strategic Outlook notes.
The recovery in Spain’s property market is good news for the country’s banks as it will provide a boost for the economy as a whole, while helping reduce the “toxic” real estate assets on the lenders’ balance sheets, says the rating agency.