Spain Economic Forecast

Spain Economic Outlook

September 1, 2020

On 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 Growth

The 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

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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