Fiscal policy latest publications
The public deficit deterioration will be greater than expected three months ago. In an unprecedented crisis, the sustainability of public debt could be compromised.
The draft for the European fiscal stimulus laid out last week by the European Commission—which builds on the recent Franco-German proposal to establish a Recovery Fund—has two interpretations and both are positive.
The economic crisis that has accompanied the COVID-19 is markedly different from others that have come before. This has made it difficult to make forecasts, with at least three sources of uncertainty: how much activity is falling, how will economic agents react and how efficient will economic policies be implemented.
The outbreak of the COVID-19 pandemic and the containment measures will have an extraordinary impact on public accounts. The deficit and the public debt will be at their highest levels in the last decade.
The recession in 2020 is inevitable. It is highly likely that Spain's GDP will fall by between 6 and 10% in 2020. And a rebound in 2021 will not be sufficient to recover the losses that have occurred during the crisis. To add to an already bleak outlook, risks are on the downside.
The 2021 Pre-Criteria guidelines for economic policy emphasizes the need to keep fiscal discipline; we think this should be done from a structural perspective to make it possible to boost public spending alongside a credible fiscal reform proposal that increases tax revenue and comes into effect after the sanitary emergency
In this Economic Watch we present different growth scenarios for the Spanish economy in 2020 under diverse assumptions and hypotheses, and evaluate the potential effects of the economic policy measures recently adopted by the Spanish government to mitigate the economic consequences of COVID-19.
March 16, 2020
China | Negative Jan-Feb economic activity outturns point to a historical low growth in Q1
A batch of record-low negative January-February indicators announced today pointed to a significant slowdown in economic activities in Q1 amid the outbreak of COVID-19 in China.