The Spanish economy soared by 16.7% during the third quarter of the year, which, as with almost all economic (and not just economic) data during the pandemic and the coronavirus crisis, is a figure never before observed. In year-on-year terms, that is, compared to last year’s situation, the variation in Gross Domestic Product (GDP) “stands at 8.7%, up from 21.5% in the preceding quarter”.
Undoubtedly, a very intense rebound that shows that the activity resumed with great intensity after the first confinement, even despite the restrictions on international tourism that is so important to the Spanish economy, and that allows the country to leave the recession in which it is plunged after two quarters of contraction. Particularly notable is, for example, the uptick experienced by household consumption, which went from 14.6% to advancing by more than 20% during the summer.
“The data we have known this week show the strong revival of the economy and employment during the third quarter of the year. In an atypical context, marked by the regrowths and the absence of international tourism, the Spanish economy has grown by more than 16%, almost 570,000 jobs have been created, and 80% of the workers have emerged in ERTE. We therefore have a good basis for economic recovery,” Deputy President of Economic Affairs Nadia Calviño said in a video.
The historic uptick comes after the economy plummeted by 17.8% in the second quarter, which alleviated the already sharp 5% drop in GDP during the first three months of the year. And it is also known at a time when Spain is mired in a second wave of coronavirus, a situation that threatens to re-invert the economy significantly during the latter part of the year and also at the beginning of the next financial year.
Restrictive measures, community perimeter closures, curfew, the Government’s desire to implement a six-month State of Alarm, and ultimately fears that further Confinements similar to March will need are already weighed on the economy. And they will do so more intensely if the measurements take over. For this reason, some economists already point to the possibility of a W-recovery,that is, that the economy will suffer a further contraction and then rebound. And Calviño herself, although she has not expressly pointed out, has referred to the complex being again – if it ever ceased to be – very complex.
“Reactivation continues, but we are in a time of high uncertainty, both at European and global level. That is why the priorities remain the same: to work in a coordinated way in Spain and Europe to tackle the pandemic as soon as possible, and to continue to support companies and families. In this way, we will be able to stay on a path of recovery and have more intense growth in 2021,” he said.
WHEN WILL THE PREVIOUS LEVEL RETURN?
In this context, one of the great doubts is when the Spanish economy will be to return to pre-crisis levels. Calviño has argued that, with the impetus of European plans, Spain will regain that path in 2023. However, the second wave signals it causes this forecast to raise many doubts, as well as the official estimates of GDP developments. The forecast is that the collapse in the year as a whole is 11%, a figure that could be low, and that the rebound in 2021 will rub 10%, which could again be excessive.
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