In recent weeks we have been observing an apparently contradictory behaviour of the financial system, in which increases in the stock price concur with main banking entities restructuring processes. But if we analyze it in depth, we will conclude that both processes are closely linked. It is precisely the strategic decisions taken by Spanish banks, of consolidation, cost savings and investment in digitalization, which the market is evaluating positively. Only this way this long period of deterioration in the financial margin can be overcome, pending a recovery in rates and in demand for credit that is not yet in sight on the economic horizon.
2021 will be the starting point of the global economic comeback, which will be uneven across regions and sectors. In the latest edition of our report “Ee SPAIN OUTLOOK for Business Strategy” at Equipo Económico (Ee) we foresee that over 2021 and 2022 we will witness an incomplete economic recovery, with a rebound for the Spanish GDP set around 6.5% and 3.2%, respectively. From 2023 on, growth will converge towards a muted potential rate. There is a need in the short term to provide a clear support to businesses. At the same time, profiting from the new European funds, it is time to push forward long delayed structural reforms.
The world and Spanish economies continue to face an unprecedented crisis in recent history. At Equipo Economico, we estimate that Spanish GDP will have experienced a drop close to 12% in 2020, and that we will witness a partial recovery of the economy in the next two years with annual growth rates of 6.8% and 2.6%, respectively. However, the recovery that we pose in our next year’s forecast has a certain artificial character, insofar as it depends directly on the continuation of the short-term effects of expansionary economic policies. We will have to wait for the “veil” created by these policies and other measures adopted to face the crisis to disappear, in order to certainly determine the profound structural change that is actually taking place.
After the sharp deterioration that the sector has suffered during the months of the state of alarm, with air transport in Spain registering a decrease of over 80%, flights and passenger traffic have been reactivated from the beginning of June, although reaching levels still much lower than in 2019.
We have been homebound due to the declaration of the state of alarm since March 14th, which entails restrictions on the rights and guarantees laid down in the, mainly with regard the freedom of movement.
This situation is duly proportionate to the significant public health risks that have resulted from the COVID-19 pandemic. And, for this reason, it has been assumed with calm and resignation by the citizens, who are setting an example of solidarity and civility.
We are currently suffering from a historical health crisis with very important economic repercussions. On Friday the Governor of the Bank of Spain referred to this situation as an "unprecedented disturbance". It is therefore necessary and pressing to adopt public policies that, initially, mitigate the impact, and later allow the economy to be restarted as soon as possible.
In spite of the strong growth and employment generation of recent years, corporate restructuring continues; companies aim to improve their efficiency and competitiveness, adapting to technological and market changes, which requires a continuous transformation effort. The success of restructuring processes, according to our extensive experience in the field, requires a number of elements such as the following.