The Bank of Spain published its quarterly report on the Spanish economy on Wednesday, March 25th, in which it described the disruption caused by the coronavirus health crisis as “transitory”. The entity has not published the estimates referring to the growth of the GDP because of the “uncertainty” that surrounds the situation.
Find out more news about Spain’s economy and how the European Union is trying to overcome a possible financial crisis, with our companion app, Born2Invest. Read the latest business news and information about the impact of the new coronavirus on the world’s economy.
The Bank of Spain asked the European Union to consider introduce elements of budgetary risk sharing
Aware that the recovery will depend “crucially on the economic policy measures implemented,” the Bank of Spain has called for a “swift and coordinated response among the authorities responsible for the various areas of economic policy.”
The organization headed by Pablo Hernández de Cos considers in the report that “the magnitude of the impact of the pandemic […] on economic activity and employment will be very pronounced in the short term” although it rules out quantifying it because of the “very high degree of uncertainty”.
The Bank of Spain stated that, on the basis of the information available, it can be said that companies are making “intensive use” of the redundancy programs, although it stressed that “most of these job losses will be recovered if, as can be expected, the nature of the disruption is temporary”.
In view of this situation, the Bank of Spain asked that “the Community authorities also contribute decisively to overcoming it.” The report assessed the instruments put in place by the European Commission but insisted that “containing the humanitarian, social and economic cost of this crisis requires coordinated and supportive action using existing budgetary and financial tools,” as well as a European employment fund.
The body thus opened the door to the “possible mobilization of the resources of the European Financial Stability Mechanism” and asked that Europe also consider “the possibility of introducing elements of budgetary risk sharing (mutualization).”
So far, the Bank of Spain believed that the fiscal measures put in place by the various countries are aimed at “facilitating access to financing for solvent private agents who are experiencing liquidity problems, preventing them from ending up in a state of insolvency, in which case the losses in activity and employment would be greater and more lasting,” it assessed.
Positive outlook through February
Despite not including estimates on the growth of the Spanish economy, the agency explained that “the most representative indicators of the behavior of the activity suggest that the GDP would have shown in the first two months of the year a similar trajectory to that observed at the end of 2019,” that is “growth in the range of 0.4% for the third quarter.”
The Bank of Spain also highlighted the employment data for the month of February “which showed a notable improvement in monthly job creation.” At the European level, it stated that “the forecasts of private analysts and public institutions available at the time of writing point, in many cases, to severe falls in GDP this year.”
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in EL INDEPENDIENTE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Which Are the Most Important Fintech News from February 2024
Monite secured $6 million in a top-up financing round, bringing its total seed-stage funding to $16 million. The funds will...
Spanish Pharma Listed Companies Reduce Their Profits by 37% in 2023
Of the Spanish pharma listed companies, PharmaMar has suffered the most significant drop in profits due to generic drug competition...
How Much Does Europe Invest in Sustainability
Europe is moving rapidly towards a renewal of the regulatory framework for sustainability , with the obligation for almost 50,000...
The German Medical Cannabis Market Could Be Worth Three Billion
Currently, the German medical cannabis market serves a relatively small part of the population, with approximately 28,000 patients, or less...
Bitcoin Jumps to Over $62,000 – Records for ETFs
Optimists are already looking ahead and say that Bitcoin's price curve will advance to previously unknown levels after reaching $68,000....
Crowdfunding1 week ago
Gamefound and CMON Enter into a Partnership
Crowdfunding2 days ago
The Ponte Piccolo is Restored Thanks to Crowdfunding
Biotech2 weeks ago
The AECC Provides 29.4 Million in Aid for 233 Cancer Research Projects
Biotech1 week ago
Biomedical Companies in Spain Demand Tax Incentives for R&D Adapted to the Reality of the Sector