By John Smith • 23 October 2020 • 11:38
A REPORT by Spanish bank BBVA suggests that the Spanish economy is likely to be something of a roller coaster ride but the long-term prognosis is better than might have been expected with 2020 seeing an overall contraction of Gross Domestic Product (GDP) by 11.5 per cent followed by growth of up to 6 per cent in 2021.
The first six months of the year had a dramatic effect on production and sales due to the lockdown but the third quarter has surprised analysts as it likely, when finally reported, to show a definite turn for the better due to growth in demand not just nationally but for exports as well.
Much will depend on the fourth quarter and the steps that national and regional governments will take in order to combat the rise in positive infections with Covid-19 and exports could also be harmed as other countries may move back into sporadic lockdown.
There is of course the Spanish Recovery Plan to be considered which will utilise the significant injection of European Union funds into the economy of which approximately 50 per cent is a grant and the balance is a long-term loan with reasonable rates of interest.
The lack of international tourism has caused significant problems both from an employment perspective where hotels either remained closed or simply shut at the end of September and this had a three-fold effect as tax revenue was lost, staff were placed in ERTE with the government paying for them and third-party suppliers lost their usual business.
All now rests on how dramatic the spike in the coronavirus pandemic is and this is something that makes all financial forecasts potentially unreliable.
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Married to Ophelia in Gibraltar in 1978, John has spent much of his life travelling on security print and minting business and visited every continent except Antarctica.
Having retired several years ago, the couple moved to their house in Estepona and John became a regular news writer for the EWN Media Group taking particular interest in Finance, Gibraltar and Costa del Sol Social Scene.
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