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The Spanish data has sharply deteriorated – well below their historical averages – since the beginning of the lockdown in March, Guillaume Derrien from BNP Paribas informs.

Key quotes

“While real GDP already declined by a record 5.2% q/q in Q1, it is clear that the contraction in Q2 will be even sharper, causing severe economic and social issues.” 

“The employment data showed a record increase in unemployment in March-April (+681,210 or +21.7% after seasonal adjustment). This is despite the introduction of temporary layoffs (ERTE) for nearly 3.39 million individuals. These persons are considered as employed is thus likely that the level of unemployment will rise even further in the coming months.” 

“In the Stability Plan submitted to the European Commission on May 1st, the Spanish government is now forecasting a 9.2% contraction in real GDP in 2020, and the public deficit is expected to swell to 10.3% of GDP.”