Tuesday, May 18

The OECD softens the fall of the Spanish economy in 2020 and leaves it at 11.6% of GDP

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The Organization for Economic Cooperation and Development (OECD) has updated its economic outlook for Spain forecasting a drop in GDP for 2020 less than previously estimated despite the second wave of Covid-19, as well as a lower increase in the unemployment rate.

In the December edition of its biennial report ‘Economic Outlook’, the ‘think tank’ has attributed to Spain a fall of 11.6% of its GDP for this year, slightly above the 11.2% decline expected by the Government. On the other hand, the OECD forecasts economic growth of 5% in 2021 and 4% in 2022.

In June, the last time the OECD offered forecasts for Spain, the agency considered that the economy would sink by 11.1% if there had only been one wave of the pandemic and 14.4% if there were two waves. Given that two waves have finally happened, the forecast improvement is almost three percentage points.


“Localized restrictions to tackle the Covid-19 outbreaks and the continued disruption of travel and tourism will be a drag on the recovery until a effective vaccine is widely deployed“, has affirmed the OECD.

The body chaired by the Mexican Ángel Gurría has explained that the “high uncertainty” and the “adverse” conditions of the labor market will affect negatively to consumption, while the recovery in external demand will help economic growth in 2021 and 2022.

Regarding the labor marketl, the new OECD forecasts are also better than their June estimates. Now the Paris-based body expects the unemployment rate to stand at 15.8% this year, which will rise to 17.4% in 2021 and slightly decrease to 16.9% in 2022.

In its previous report, the OECD considered that This year unemployment would be 19.2% in the case of a single wave and 20.1% in the case of two. In this way, the improvement was 4.3 percentage points. For 2021, the institution expected a strike of between 18.7% and 21.9%, depending on whether one or two waves had occurred.

World outlook

The Organization for Economic Cooperation and Development (OECD) has placed the drop in world gross domestic product (GDP) for 2020 by 4.2%, which represents an improvement of three tenths with respect to the drop of 4.5% that had been forecast in September, according to the biennial report ‘Economic Outlook’, published this Tuesday.

“For the first time since the pandemic began, now there’s hope for a brighter future. Progress with vaccines and treatments has raised expectations and uncertainty has decreased, “said the Paris-based chief economist of the agency, Laurence Boone.

On the contrary, the OECD has decided to revise the growth for 2021 down to 4.2%, eight tenths less than in its September forecasts. By 2022, the Paris-based body has attributed a 3.7% rise to world GDP.

“We hope that the recovery is uneven across countries, potentially producing lasting changes in the world economy, “added Boone, explaining that China, which began its recovery earlier, will account for a third of world growth. At the same time, the contribution of Europe and North America will be less than their weight in the world economy .


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