Spain Economic Forecast

Spain Economic Outlook

October 27, 2020

After an unprecedented collapse in activity in Q2, recent data hints at a recovery that is already losing steam. Industrial production continued to cool midway through Q3, barely growing in monthly terms in August. Moreover, after returning to growth in July, the composite PMI slumped back into negative territory in August and fell deeper into contraction in September as the worsening of the health crisis pummeled services-sector activity. This, combined with consumer confidence remaining in the doldrums in Q3 and the reinstatement of stricter measures to combat the recent surge in virus cases, most notably in Catalonia and Madrid, bodes ill for household spending and thus the crucial services industry heading into Q4. Meanwhile, the government sent its 2021 draft budget to EU authorities for review on 15 October. The expansionary plan, which incorporates a slice of EU coronavirus recovery funds, should aid the revival of activity ahead.

Spain Economic Growth

After a severe recession this year due to the Covid-19 blow, the economy is seen rebounding strongly next year as domestic and foreign demand come back to life. That said, key downside risks remain, including the prolongation of the health crisis, a languishing tourism industry that is prone to experiencing permanent damage, and persistent elevated unemployment. Our panelists expect the economy to grow 6.6% in 2021, which is down 0.6 percentage points from last month’s forecast, and 4.2% in 2022.

Spain Economy Data

2015 2016 2017 2018 2019
Population (million)46.446.446.446.446.7
GDP per capita (EUR)23,21924,00625,03625,88226,692
GDP (EUR bn)1,0781,1141,1621,2021,245
Economic Growth (GDP, annual variation in %)3.83.02.92.42.0
Domestic Demand (annual variation in %)4.12.13.12.71.5
Consumption (annual variation in %)2.92.63.01.81.1
Investment (annual variation in %)4.92.45.95.31.8
Exports (G&S, annual variation in %)4.35.45.62.22.6
Imports (G&S, annual variation in %)5.12.66.63.31.2
Industrial Production (annual variation in %)3.21.93.20.30.7
Retail Sales (annual variation in %)4.23.90.70.82.4
Unemployment Rate22.119.617.215.314.1
Fiscal Balance (% of GDP)-5.2-4.3-3.0-2.5-2.8
Public Debt (% of GDP)99.399.298.697.695.5
Inflation Rate (HICP, annual variation in %, eop)-0.11.41.21.20.9
Inflation Rate (HICP, annual variation in %)-0.6-0.32.01.70.8
Inflation (PPI, annual variation in %)-2.1-3.14.43.0-0.4
Policy Interest Rate (%)-  -  -  -  -  
Stock Market (annual variation in %)-7.2-2.07.4-15.011.8
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)2.03.22.71.92.0
Current Account Balance (EUR bn)21.835.431.123.324.9
Trade Balance (EUR billion)-24.2-18.8-24.7-33.8-32.0

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Spain Facts

Value Change Date
Bond Yield0.465.62 %Dec 31
Exchange Rate1.120.65 %Dec 31

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