• Covid-19. The Government foresees a recession of 9.2% and an increase in unemployment to 19% that will not recover in 2021
  • Coronavirus. The Spanish economy suffers a historical contraction: GDP fell 5.2% in the first quarter
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The Government has already calculated the consequences that the crisis caused by the coronavirus will have for the Spanish economy and, without a doubt, they are catastrophic. The Gross Domestic Product (GDP), advances in the budget program that on Thursday night sent to Brussels, will collapse 9.2% this year and the recovery will occur in what Nadia Calviño, vice president of Economic Affairs, defined as an "asymmetric V". In other words: that despite the initial speech of the Executive, in 2021 everything lost will not be recovered . Not much less.

In fact, the rebound in the coming year will be 6.8% and if the data and graphs prepared by the Economy are taken, it is clearly seen that at the end of the year it will still be far from the situation of 2019. The Government, therefore , acknowledges that Spain will not return to pre-crisis levels until at least 2022. The recovery of all the additional growth lost seems, at least right now, a pipe dream .

Starting from this point, the document is a collection of historically negative news that, in addition, starts from a "prudent" scenario, as defined by Calviño in the press conference that he offered yesterday with the Minister of Finance, María Jesús Montero. An example: the deficit will reach double digits, specifically up to 10.3%, and the debt will go beyond 115.5% of GDP. If these figures are translated again, what is found is that the budget deviation will exceed 110 billion euros and the public debt will touch 1.3 billion euros. A new historical maximum that recalls the numerous warnings that Spain received about the need to reduce its debt, and which successive governments ignored. The last example, the blushing deviation from last year's deficit.

There is more. The Executive recognizes that the average unemployment rate will rebound to 19%, so there will be times during the next year when the figure greatly exceeds that level, and predicts that the number of "unemployed because of the Covid-19 they receive benefit »amounts to no less than 900,000 people . "And this is the central scenario, a month ago we considered it as the most adverse but the situation has deteriorated," explains Gregorio Izquierdo, general director of the Institute of Economic Studies (IEE). This means that in case of additional disturbances the figure could exceed one million people. Extraordinary data keeps piling up.

"But it must also be taken into account that these figures do not include all workers who will suffer an ERTE," adds the head of the CEOE think tank . In this sense, the Government recognizes that up to four million people will have to use the ERTE model developed to try to alleviate the consequences of the crisis. Likewise, 1.4 million self-employed will be beneficiaries of the extraordinary benefit, more than 400,000 will receive aid for temporary workers and another 400,000 will receive temporary disability. If we add to this the aforementioned 900,000 who will go on strike, the result is that 7,162 million people will be, at some point this year and in one way or another, under the protection of the State . 31% of the active population. Dizzy.

However, everything could go even worse. The Independent Authority for Fiscal Responsibility (AIReF) studied and gave its endorsement to the document yesterday. The result of its usual work until the body led by Cristina Herrero introduced the following warning: " More adverse scenarios cannot be ruled out , mainly due to the intensity of the recovery."

According to AIReF, it is not at all ruled out that the recovery will be complicated in the event that "more adverse epidemiological scenarios or more persistent damages in the productive capacity of the economy and employment that hinder recovery" materialize.

The purely tax part also actively collaborates in reaffirming the importance of this stability program. The Ministry of Finance estimates that the collection will plummet by just over 25,000 million, representing a drop of around 5% . The decline is significantly smaller than expected for the economy as a whole, which could raise some doubts about the official forecast and anticipate that the decline will actually be greater.

In any case, Montero explained that the expected evolution is as follows: Companies will contribute almost 9% less for "the drop in business profits that are caused by economic inactivity"; VAT collection will decrease by 5.2% due to the paralysis of consumption; in personal income tax the data will be at least -2.4%; and special taxes will collect 6.4%.

If we add to this an increase in spending of 10 points, which represents some 57,000 million, we get a good clue as to why the aforementioned budget imbalances will accumulate and, at the same time, explain Montero's desire to speed up the process Tobin and Google rates. Its impact, in any case, will be scarce given the magnitudes and the times. But any aid will be welcomed by the Government, which has also already rejected the possibility of undertaking a cut in pensions or public payrolls. Although the precedents make think exactly the opposite .

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