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Bank of Spain Governor and European Central Bank (ECB) Pablo Hernandez de Cos said in an annual report released on Thursday.

Key takeaways

“Sees economy rebound in the second half of 2021 though effects from COVID-19 will last for years.”

“Spanish recovery relies on vaccination pace, implementation of EU recovery funds and reforms.”

“Recovery of tourism, private consumption and efficient furlough schemes key to the still-fragile economy. “

“Spain could grow more in 2022 than expected due to delayed boost from EU recovery funds.”

“A “very accommodative” monetary policy in coming quarters is needed due to fragile EU economic recovery.”

“PEPP purchases should be adjusted if the rise in interest rates not accompanied by the return of medium-term inflation.”

“Calls for dual fiscal authorities at national and European level.”

“National body should focus on debt sustainability while the EU authority should respond to tail events.”

Market reaction

EUR/USD sustains the bounce above 1.2050 on the above comments, trading modestly flat on the day.

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