Spain’s National Bank Reviews the Effects of the Pandemic and the Economic Future

THE Bank of Spain has published its overview of the effects of the Covid-19 pandemic on the Spanish economy and what it expects for the future.

It recognises that the figures expected of GDP growth in 2020 will not be reached but highlights the fact that even before the lockdown, growth was sluggish.

On the plus side however, it does expect to see a decent bounce back in 2021 and believes that the economy is much stronger than it was in 2008 and should therefore be ready to weather the economic storm quicker and with more resilience than previously.

It sees a need to recognise the importance of remote working as prior to the state of alarm less than 10 per cent of the working population worked from external sites but it believes that up to 80 per cent of those not on ERTE worked online during the lockdown.

This is a potential future strength for the economy especially if more technology savvy youngsters are able to find work without having to worry about travel expenses.

In the report, the Bank recommends that the Government should encourage employers to move away from short term contracts and to do a great deal to support small businesses as a high percentage of all employers in Spain have five staff or less.

Although not mentioned in the report, it is clear that the Government intends to increase taxes for wealthy individuals and companies to try to recover some of the billions spent in the first half of 2020.