Regional Analysis Spain
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The fall in GDP expected as a result of COVID-19 will be unparalleled in history. The decline in GDP per working-age population in 2020 is expected to be 10% greater than the decline seen in 2019, marking a return to levels seen in 2015.
The recovery in consumption continued during the week of 22nd to 28th June. The fall in card spending moderated to -2% year-on-year, despite the 5% increase in purchases with Spanish cards. Although consumption with foreign cards improved, it still fell by -73% compared to the same period last year.
July 2, 2020
Spain| Historical drop in employment in 2Q, despite the ERTE & the positive figure in June
Social Security enrolment increased by 68,200 people (-4.6% p/a) in June and unemployment rose by 5,100 (28.1% p/a). Adjusted for seasonality, employment grew by 27,400 people, but unemployment continued to rise (80,900). In 2Q20, affiliation fell by 4.7 t/t CVEC and the number of unemployed rose by 18.8%.
Twenty years ago, the Spanish economy started its journey into the 21st century after joining the eurozone in 1999. Since then, Spain has faced two economic expansions and two intense crises of a very different nature, with important consequences for economic policy.
This Economic Watch assesses the structural shocks that explain the cyclical behavior of the Spanish economy during the COVID-19 crisis. For this purpose, we use information from the latest forecasts from BBVA Research (2020) which are exogenous to the model.
In Castilla-La Mancha, GDP could fall between 6.4% and 9% depending on the scenario and the recovery by 2021 could be insufficient to recover the GDP levels of early 2019. Employment could fall between 6.1% and 8.7% in 2020, which would mean losing between 20,000 and 32,000 jobs in the biennium.
The recovery in consumption continued during the last week of the state of alarm. The fall in card spending, which was over -60% year-on-year in mid-April, moderated to -4% between 15 and 21 June due to the 5% growth in purchases with Spanish cards.
The recovery in consumption continued with the advance of de-escalation. The fall in card spending, which was more than -60% year-on-year in mid-April, eased to -5% in the second week of June due to the 3% growth in purchases with Spanish cards.