Spain Economic Outlook
September 1, 2020On the heels of a record-setting drop in Q1, economic activity plunged at yet another historic pace in Q2 on the full weight of lockdown measures introduced to curb Covid-19’s spread. Both private consumption and fixed investment plummeted, while exports collapsed by roughly a third as the vital tourism industry screeched to a halt. The unemployment rate also spiked to a two-year high, which still did not fully reflect the blow to the labor market since over two million workers had been placed on temporary furlough or dropped out of the labor force. More positively, turning to Q3, the composite PMI crossed into expansionary territory in July thanks to more upbeat services activity and a rebound of the manufacturing sector. That said, a recent rise in new Covid-19 cases, which has prompted the reinstatement of some restrictions, bodes ill for the recovery, particularly for the ailing tourism sector.
Spain Economic GrowthThe economy is poised to record a massive contraction this year as the Covid-19 fallout suppresses demand both at home and abroad. The travel and tourism industry will reel due to the collapse of visitors, with a heightened risk of permanent damage in the all-important sector. A weak labor market and the resurgence of new coronavirus cases further cloud the outlook. Our panel foresees the economy shrinking 11.5% in 2020, which is down 1.1 percentage points from last month’s forecast, before growing 7.1% in 2021.
Spain Economy Data
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Spain Economic News
September 11, 2020
Industrial production fell 6.4% year-on-year in seasonally- and calendar-adjusted terms in July, following June’s 14.3% drop.
September 3, 2020
Reflecting a stagnating manufacturing sector and a swing to contraction of services activity, the IHS Markit composite Purchasing Managers’ Index (PMI) dropped to 48.4 in August from 52.8 in July, which had marked the highest reading since April 2019.
August 31, 2020
Spain’s current account balance recorded a surplus of EUR 2.0 billion in June, markedly below the EUR 3.8 billion surplus recorded in June 2019 but above the EUR 0.8 billion surplus logged in May.
August 28, 2020
Retail sales dipped 3.7% compared to the same month a year earlier in July, slightly more than June’s 3.3% fall.
August 5, 2020
Reflecting a return to growth by the manufacturing sector and a slightly stronger expansion of services activity, the IHS Markit composite Purchasing Managers’ Index (PMI) climbed from 49.7 in June to 52.8 in July, the highest reading since April 2019.