Fighting Covid effects will cost Spain €61 billion until 2023

Fighting Covid effects will cost Spain €61 billion until 2023

CREDIT: Pixabay

THE Bank of Spain has estimated that the expense of fighting Covid between 2020 and 2023 will be more than €61 billion.

The financial crisis resulting from the pandemic has caused a historic dip in the Spanish economy of 10.8 per cent in 2020, and has resulted in a huge rise in public expenditure to help lessen the effects of the pandemic on families and businesses, amounting to 5.5 per cent of the Gross Domestic Product.

According to a report in national Spanish daily 20 minutos, the Bank of Spain has estimated that the outlay in 2020 to fight the effects of the pandemic rose around 3.5 per cent of the GDP, or around €40 billion, mainly due to the payments to furloughed workers.

It is estimated that the highest outlay is already over, as 2020 will have been the year that caused the worst effects on the Spanish economy with almost everything closed for three months, but the strain on the economy continues to be very high, having extended furlough payments until May, as well as benefits for self-employed workers and cash injections which could continue until the end of this year.

The Bank of Spain estimated that public expenditure to fight the pandemic this year will amount to 1.4 per cent of the GDP (around €16 billion); as well as an extra 0.3 per cent over 2022 and 2023, amounting to €6.6 billion over the two years.

The Bank of Spain estimates that the country will not have completely got over the financial crisis caused by the pandemic until mid-2023.

This increased spending comes at the same time as a fall in the amount received from taxes, as many businesses have had to close, causing a public deficit of 10.5 per cent of the GDP in 2020 (€11 billion) an extremely high figure, which has never been reached before, not even in the previous financial crisis.

This deficit is expected to fall gradually to 7.7 per cent this year, 4.8 per cent in 2022 and 4.4 per cent in 2023, all based on the estimations of the Bank of Spain, which is still a lot higher than the EU stipulation of under three per cent of the GDP in normal circumstances.

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Jennifer Leighfield

Jennifer Leighfield, born in Salisbury, UK; resident in Malaga, Spain since 1989. Degree in Translation and Interpreting in Spanish, French and English from Malaga University (2005), specialising in Crime, Forensic Medicine and Genetics. Published translations include three books by Richard Handscombe. Worked with Euro Weekly News since November 2006. Well-travelled throughout Spain and the rest of the world, fan of Harry Potter and most things ‘geek’.