Moody’s points out that Spanish public debt is at maximum levels for a century. Thus, it will take into account in its next rating reviews whether the Spanish government presents a credible plan to reverse the fiscal deterioration aggravated by Covid-19. A downgrade of the current rating (Baa1 with a stable outlook) could lead to the downgrade of more than 50% of Spain’s companies’ in 18 months. Even so, this warning is not exclusive to Spain (public debt/GDP 120%), as there are other countries with high debt problems (Italy 158%, Greece 200%, Portugal 137%).
spanish economy 2021
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.
The International Monetary Fund revised upwards estimates of global growth in 2020 but warned of a long and asymmetric recovery with uncertainties in which Spain will be the developed economy that falls most in the year. Thus, the agency now expects world GDP to fall by 4.4% in 2020 ( against -4.9% in June), thanks to China’s performance. The IMF forecasts for Spain a fall of 12.8% in 2020 to recover 7.2% in 2021. This drop is more than double that expected for the advanced countries as a whole (-5.8%).