El avance de la vacunación a nivel mundial durante el segundo semestre de 2021 y la relajación de las restricciones ha permitido que el ritmo de recuperación económica se haya intensificado. Para España, desde Equipo Económico (Ee), consideramos que el aumento del PIB podría alcanzar el 6,3% en 2021 y el 4,9% en 2022. A pesar de la fortaleza del crecimiento esperado en el corto plazo, la erosión de la estructura económica a consecuencia de la crisis dificultará que el volumen de actividad alcance los niveles de PIB potencial anteriores a la pandemia.
The recently approved new line of direct, non-reimbursable financial assistance to companies and the self-employed affected by the crisis has an endowment of 7 billion euros. However, the availability of this aid only for certain sectors and the absence of clear and adequate eligibility criteria for them, have led to a significant number of companies being excluded from it. Within its parliamentary procedure framework, there is still room to seek to extend support to all sectors and companies that have also been affected by the crisis.
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.
The analysis of the 2021 Budgetary Plan sent to Brussels by the Spanish Government leads us to affirm that public income will hardly reach the expected increase next year. In addition, by not insisting on the necessary search for the efficiency in public spending, everything indicates that public deficits for 2020 and 2021 will be higher than official forecasts. However, it is through the achievement of solid macroeconomic and budgetary fundamentals, opening up to the outside world and undertaking structural reforms, that the Spanish economy will overcome the current crisis, as it has done so on previous occasions.
The world economy continues to tackle the severe crisis caused by Covid-19. The pandemic has plummeted the Spanish economy harder than the rest of its European partners. The recovery of activity in the weeks following the end of the confinement has not shown the expected drive during the summer. Against this backdrop, Equipo Económico (Ee) has revised its GDP forecast for this year two points downwards, when the drop in GDP will reach -12.0%. The degree of success and effectiveness of economic policy will very much determine the strength of the recovery.
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.
At Equipo Economico we maintain, at the moment, our estimated contraction of the Spanish GDP of, at least, 10% in 2020. In 2021, the economy pickup would allow it to grow at 7.2%, although this will be insufficient to reach previous annual levels of growth and employment. The implementation of an adequate economic policy is urgent to overcome the challenges posed by the depth of the crisis in Spain and strengthen recovery.
The real estate sector is proving to be one of the most affected by the Covid-19 crisis in Spain. The framework of uncertainty around the virus, together with poor economic prospects and the impact on the labor market are delaying investment decisions. All of the above forecast that the diminishing demand for residential housing will continue in the coming months. On the other hand, the medical origin of this crisis, as well as its exceptional nature, could be causing a change in the tastes and preferences of consumers, who now place a higher value in space and light, to the detriment of location.
The world economy is being strongly affected by the impact of the Covid-19 pandemic. The necessary search for the containment of the progression of the disease has led to a general disruption of the economic activity, including Spain. In this context, we expect the contraction of Spanish GDP to reach 10% in 2020. The impact of the crisis will be heterogeneous at the sectorial level. In order to recover from this crisis, the needs of the productive network must be considered with the utmost care, since they represent the main generator of employment.
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.
Since the 2012 labor reform, the Spanish business environment has been better adapted to market needs and technological changes, with a positive net effect on the level of employment.
The case of Italy in the last year, and of other countries in the past, show the negative effect that the wrong economic policy messages can have. The Spanish economy continues to grow noticeably above the Eurozone average. However, it is immersed in a different phase of the economic cycle with lower expansion rates. The design of economic policy plays a determining role in the economy’s cyclic performance. Yet the uncertainty generated by numerous economic policy messages, at the national and regional level, has resulted in a significant drop in the number of car registrations in Spain in the last few months.
Although hotel industry has been encouraged by excellent tourism data, is it really benefiting to its full potential? There is a negative trend in hotel supply in relation to the number of visitors. The irruption of alternative business models that offers tourist accommodation, such as technological platforms of collaborative economy between private individuals together with the new patterns of consumption of tourists, have led to the emergence of a new and important competitor.
The real estate market in Spain is in a bullish mood and continues steadily on the path of recovery and sustainable growth, after having undergone an important adjustment in the last decade, both in terms of volume and prices. Thus, during the past year, home sales experienced growth of 13.6% to attain 403,866 transactions, making three consecutive years of upward trend. The challenge facing the real estate sector is, in any case, twofold: stabilizing the sector and avoiding the mistakes and excesses committed in the past. Therefore, recovery must be prudent, sustained and gradual throughout 2017.