Spain’s GDP has fallen to levels not seen since the Spanish Civil War in the late 1930s, raising fears that the coronavirus crisis will rebound much slower than other EU member states.
The country’s public administrations are more in debt than ever.
However, the debt-to-GDP ratio, the most reliable indicator for measuring a country’s ability to repay its debts, is lower than the records reached in May, when it exceeded 125% of GDP.
Data for September, released by the Bank of Spain on Wednesday, shows that rate now stands at 122.1%, and the Ministry of Economic Affairs hopes the ratio will continue to decline until the end of the year, the official target is 119.5%.
Since September of last year, the debt has increased by 124,097 million euros (up 9.5%).
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Government revenues have declined while spending to implement coronavirus support measures has increased.
State debt stood at 1,240 billion euros in September, 15,178 million more than in August (up 1.23%).
On a year-over-year basis, the central government saw its debt increase by 6.2%.
Among all EU members, the economic impact of COVID-19 has been the most barely felt in Spain.
As much of the euro area progresses towards pre-pandemic production levels, there is still a great void to be filled in a country which, in terms of coronavirus cases, is showing promising numbers.
His slow recovery is not in line with the fact that he has some of the lowest infection rates in Europe.
Spain received a down payment of 9 billion euros in August.
It will receive the remaining part by the end of the year, said Spain’s Economy Minister Nadia Calvino, on condition that it meets a series of milestones – in total 52 – mutually agreed between the country of Southern Europe and the European Commission.
They include climate change mitigation targets, equal pay for men and women and digitization strategies.
Spain may have become the first Member State to apply for its share of the fund. Given its economic position, however, this was still a late decision.
A recent report from AIReF, Spain’s fiscal watchdog, found that this would slow the country’s impact on growth.
Energy and labor prices, as the European Commission’s autumn forecast underlines, along with the supply chain crisis and a weak tourist season are further adding to the country’s difficulties.
Last year’s forecast for the economic recovery showed a 9.8 percent expansion – which includes a 2.6 percent increase in stimulus funds – but that figure fell to 6.5 percent.
Growth is now expected to be even lower, at around 5.5%, according to AIRef.
Of the damage caused by the pandemic in 2002, less than half would be compensated at this rate.
Additional reporting by Maria Ortega