Spain Economic Outlook
June 2, 2020On the heels of the worst downturn on record in Q1, caused by the nationwide lockdown announced in mid-March to curb Covid-19’s spread, the economy is set to reel even further in Q2 as the full brunt of containment measures is felt. In April, retail sales were decimated due to the closure of businesses, while the services PMI sank to a record low as output and new orders collapsed at unprecedented rates. The manufacturing PMI also plummeted, though less than that seen during the Great Recession. On a somewhat positive note, job losses eased in April and employment began to slowly recover through mid-May. Moreover, the gradual easing of restrictions nationwide came into full swing later in the month, with inbound tourism set to be restored in July—giving some hope to the battered industry. On the policy front, on 29 May, the government approved the creation of a monthly basic income scheme ranging from EUR 462–EUR 1,105 for poor households.
Spain Economic GrowthThe economy is poised to suffer a severe slump this year on the Covid-19 shock. Higher unemployment and income losses will hammer household spending; elevated uncertainty and weak demand are set to hamper investment; and exports will collapse on the ailing tourism sector. The drastic deterioration in public finances darkens the outlook. Our panel forecasts the economy to shrink 9.7% in 2020, which is down 1.7 percentage points from last month’s forecast, before growing 6.3% in 2021.
Spain Economy Data
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|Bond Yield||0.46||5.62 %||Dec 31|
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Spain Economic News
July 6, 2020
Industrial output plummeted 24.5% year-on-year in seasonally- and calendar-adjusted terms in May, less severely than April's 34.1% collapse, which had marked the steepest fall on record.
July 3, 2020
Reflecting a much weaker contraction of the manufacturing sector and a return to growth by the services sector, the IHS Markit composite Purchasing Managers’ Index (PMI) jumped to 49.7 in June from 29.2 in May.
June 30, 2020
The Spanish Board of Architects approved 3,872 new construction permits in April, according to data published by the Ministry of Public Works.
June 30, 2020
Spain’s current account balance recorded a deficit of EUR 1.5 billion in April, contrasting the EUR 2.9 billion surplus recorded in April 2019 and following the EUR 0.3 billion deficit logged in March.
June 30, 2020
A second GDP estimate released by the National Statistics Institute (INE) on 30 June confirmed that the economy suffered its worst downturn on record in the first quarter, battered by the initial effects of the Covid-19 outbreak and associated containment measures.