THE Spanish Prime, Pedro Sanchez, is rather pleased with himself for having secured substantial economic aid from EU coffers to drag the country through the pandemic but at some point, the money is going to have to be paid back and the nation’s virus debt will be outstanding for generations to come.
And, the latest market indications and forecasts are worse than expected.
The International Monetary Fund revised upwards its estimate of global growth in 2020 but warned of a long and asymmetric recovery with uncertainties in which Spain will be the developed economy that falls most in the year.
The fall in Spain’s GDP in 2020 is more than double than expected for the advanced countries as a whole (-5.8%) and is three times greater than that estimated for the global economy (-4.4%).
Among the largest economies in the world, only Italy, with an estimated fall in its GDP of 10.6% and India, with one of 10.3%, will register a negative double-digit growth, although significantly lower than that experienced by the GDP of Spain.
So who, or rather how, is Spain going to cover its covid debts?
One has to bear in mind that the Spanish government has yet to sign off on a national budget which means that, despite claims to the contrary, there is time for tax hikes to be slipped in and that is the last thing the country needs on the back of the pandemic.