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Published on Thursday, March 10, 2022

Spain | War economy

The sanctions imposed on Russia will impact negatively on the Spanish economy. There are few direct transmission channels, but the indirect ones could put a brake on recovery in the next few months.

Key points

  • Key points:
  • Russia accounts for less than 1% of Spanish goods exports and around 2% of foreign tourism expenditure. What is more, with a few exceptions, there has been very little direct investment between the two countries over recent years.
  • In addition, our financial system has no direct exposure to either Ukraine or Russia, which removes the possibility of contagion from falling asset prices in these countries.
  • However, despite the low level of business and financial relationships, there are still regions and companies that specialize in selling to Russian customers, and these will obviously suffer directly as a result of the sanctions.
  • At BBVA Research, we have seen that in situations like the one we currently face, with declining confidence and reductions in crude oil supply, for every permanent increase of 10% in the price of oil, there is likely to be a fall of half a point in Spanish GDP.
  • The stock market also reflects the uncertainty felt by households and firms. We estimate that for every 10% decrease in household net financial wealth, there is a 0.3pp drop in private consumption expenditure.

Associated documents for downloading

  • Report (PDF) Miguel_Cardoso_Economia_de_guerra_Expansion_WB.pdf Spanish March 10, 2022

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