Spanish Economy under COVID-19: Anamnesis and Prospects for Recovery

145
DOI: 10.20542/0131-2227-2021-65-1-42-49
K. Nikulin (nikulin@imemo.ru),
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation

Acknowledgements. The article was prepared within the project “Post-crisis world order: challenges and technologies, competition and cooperation” supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement 075-15-2020-783).


Abstract. In 2019, Spanish economy maintained the post-crisis growth rates of the 2010s’ second half, although they were slightly lower than the average for the last period due to both, political and economic factors. The political uncertainty fueled by the necessity in holding four general elections in 2018–2019 has slowed down the search for consensus on reforming the country’s financial system. The decline in domestic demand reflected the evolution of personal consumption and investment, while the contribution of external demand was attributable to a slowdown in imports and slightly stronger exports. Low inflation and almost zero interest rates in banks also provided a favorable situation. By the end of the first quarter of 2020, the generally positive economic outlook was largely undermined by the global economic crisis caused by the COVID 19 pandemic which affected humanity in all socio-economic aspects. In the short term, the decline in Spain’s GDP and overall business activity is unprecedented since the country’s democratic transition that started on 20 November 1975. Even the vibrant Spanish foreign economic sector was tied: both external and internal demand for almost any economy in the world was in an equal crisis state with the start of the pandemic. Many factors analyzed point to a more precarious position in Spain compared to other countries. The Bank of Spain expects the Spanish GDP to fall by double digits in 2020 and it looks like the most realistic scenario. The article analyzes the economic situation in Spain by the beginning of the COVID 19 pandemic, examines the reaction of the national economy to the coronavirus, the individual measures of the Spanish government and the supranational institutions of the EU to combat the pandemic are analyzed, as well as a forecast regarding the post-crisis future of the country’s economy is given.

Keywords: Spain, economic crisis, COVID 19, external and internal demand, macroeconomic forecast, fiscal policy, unemployment, government support for business


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For citation:
Nikulin K. Spanish Economy under COVID-19: Anamnesis and Prospects for Recovery. World Eonomy and International Relations, 2021, vol. 65, No 1, pp. 42-49. https://doi.org/10.20542/0131-2227-2021-65-1-42-49



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