Spain | Fiscal Watch 2Q20

Summary

The outbreak of the COVID-19 pandemic and the containment measures will have an extraordinary impact on public accounts. The deficit and the public debt will be at their highest levels in the last decade.

Key points

• Key points:
• After a decade of fiscal adjustment, the public deficit increased in 2019 to 2.8% of GDP.
• The pandemic will have a significant fiscal cost. Expenditure is expected to rise sharply, due to the measures to support employment and families, while there will be a significant loss of income derived from inactivity.
• As a result, 2020 will close with a deficit of around 10.8% of GDP and a public debt of over 115%.
• In a trend scenario, the deficit will be reduced to 6.6% of GDP in 2021.
• These projections have significant discrepancies with those presented by the Government in the stability programme.

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