Economic Growth & Inequality
Economic Growth & Inequality latest publications
At the start of the COVID-19 crisis the Spanish public pensions system had already suffered from a chronic deficit. Since 2011 it has exhibited an imbalance, which amounted to around EUR 18 billion—1.4% of GDP—in 2019. There is little doubt that this economic crisis will be the most intense since World War II.
As the Spanish economy was still recovering from the effects of the Great Recession, the COVID-19 crisis had a dramatic impact on its labor market, which has been the worst-performing in Europe during said crisis.
September 4, 2020
Financial vulnerability of households facing COVID-19 pandemia: A global perspective
Lockdowns due to COVID-19 and the subsequent crisis have caused many individuals to stop working or substantially reduce their work hours, with the corresponding decrease or loss of the main source of income. The analysis of the financial vulnerability of households becomes especially important.
The COVID-19 pandemic is turning society's finances into a mixture of two diametrically opposed worlds, much the same as the tiny Lilliput and the gigantic Brobdingnag from Jonathan Swift's dystopian world in Gulliver's Travels.
Public expenditure in Spain could grow between 10 and 11 percentage points (pp) of GDP in 2020, surpassing 52% of GDP, according to BBVA Research forecasts. This increase is justified by the atypical situation that the Spanish economy is experiencing due to COVID-19.
As with other health crises throughout history, the world will change in many ways as a result of the COVID-19 pandemic. One of these transformations will be in the way people relate to their finances.
A few days ago, the INE (Spanish National Statistics Institute) published the results of its 2019 Survey of Living Conditions using income data from 2018. The survey shows that inequality with respect to income after taxes and transfers declined once again in 2018.
The reform proposal is correct and constitutes a step in the right direction. The SHCP would propose adjustments to the current regime in order to increase coverage and replacement rates of IMSS pensions