Spain’s economy expected to bounce back in third quarter

SPAIN’S economy will show a significant bounce back in the third quarter, according to the most recent AIReF Independent Authority of Fiscal Responsibility calculations.

The organisation headed by Cristina Herrero expects the national economy to grow by 15.2 per cent between the beginning of July and the end of September.

AIReF has based its predictions on MIPred, a real time model forecasting the evolution of GDP which the body updates with the available statistics.

It takes into account data like the average number of workers being registered in the Social Security system, consumption of cement and electricity, the financing of companies, imports and the number of people on ERTE temporary suspensions of job contracts.

The forecast is positive news, but this increase would not be sufficient to make up for the historic 18.5 per cent drop in Spain’s Gross Domestic Product registered for the second quarter of the year as a result of the Covid-19 crisis and lockdown.

The hammer blow of the pandemic also means that Spain is expected to end the year with an economic decline.

The Government has put the drop for the whole of 2020 at 9.2 per cent, while the latest predictions from the AIReF put it at somewhere between 10.1 and 12.4 per cent, depending on how the Covid-19 situation pans out.