A "dantesque" summer for the tourism sector and the lack of certainty about a way out of the health crisis caused by the coronavirus lead the Bank of Spain to worsen its expectations about the Spanish economy.
The supervisor has published its third quarterly report, notably correcting the expected growth of the economy in 2021 downwards. The agency estimated last June that the impact of the measures to curb the pandemic would be less than what it finally was between April and June.
Finally, the reality reflected a more severe fall (-18%) than expected.
Economists had also considered that a "robust" economic recovery would take place since June, leaving the worst of the crisis behind.
But outbreaks and quarantine measures adopted by countries that send millions of tourists to Spain in summer frustrated this expectation.
Thus, the Bank of Spain has changed its vision of what the Spanish economy holds in 2021. A lower starting point than expected and the traces that a "more persistent than expected" crisis will leave lead the agency to radically lower your expectations.
"The slower acceleration of the economy in 2020 implies a worse starting point for 2021 and that difference explains the weakness of the recovery," explained Óscar Arce, general director of the Economy of the Bank of Spain.
Last June, the Bank of Spain predicted that, bringing down 11.6% in 2020, the Spanish economy would resume growth in 2021 with a GDP growth rate of 9.1%.
In its current revision, the downside risks derived from the health situation and the effects on the productive fabric lead to greater pessimism: the economy will be able to grow by 7.3% in the best of scenarios and by 4.1%, less than half, at worst.
The agency's forecasts are based on the assumption that until the second quarter of next year there will not be a vaccine that clears the question of when the coronavirus can be fought with means that do not restrict mobility.
They also exclude the effects of the macro aid plan launched by the European Union as they are not yet scheduled either in terms or in specific amounts.
Finally, it does not take into consideration a possible extension of the income aid schemes such as temporary employment regulation files (ERTE) pending the final conclusion of this agreement between the Government and social agents.
On this basis, the Bank of Spain has constructed two macroeconomic scenarios that are based on a worse or better health situation and that, in any case, draw a much slower exit from the crisis in terms of business activity and employment of what was initially expected.
The supervisor's data indicate that unemployment could end 2020 with a rate of 20%, always depending on the characteristics of the aid schemes decreed.
In this sense, Arce has expressed the opinion of the Bank of Spain in favor of schemes that increasingly "focus" aid towards sectors and workers that have their activity in "viable" businesses.
"It is not easy because we do not yet know which sectors will be strengthened or harmed by the crisis but as the situation progresses the pressure on public resources is very high," he warned.
The Government is trying these days that companies and unions accept this thesis with a view to future protection schemes, although the social agents reject it.
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