Centro de Documentacion de Fundación MAPFRE - Spain country risk report Q2 2023 : includes 10-year forecasts to 2032

MAP20230011102

Spain country risk report Q2 2023 : includes 10-year forecasts to 2032 / Analyst: Conor Beakey. — London : Fitch Solutions, 2023

67 p.

Sumario: ECONOMIC RISK: Spain was one of the hardest-hit economies by the Covid-19 pandemic, though it has weathered the fallout from Russia's invasion of Ukraine reasonably well. The report expects the negative repercussions of these shocks - namely a surge in public debt and an acceleration in inflation that has allowed the European Central Bank to begin normalising monetary policy - to be felt in the years ahead, as these developments will limit the government's ability to counter future recessions with aggressive fiscal stimulus. This will leave Spain vulnerable to prolonged bouts of sub-trend growth in the event of future potential negative shocks. Additional challenges also lie ahead (such as a worsening demographic profile amid weak productivity growth), but as part of its Recovery and Resilience plan the government has committed to implement significant structural reforms aimed at boosting competitiveness in key export-orientated industries, ensuring the sustainability of the pension system and increasing educational attainment. While it sees some scope for such reforms to bear fruit, helping to push lower high youth unemployment in particular, the lack of a strong political consensus may also delay the implementation of some of these reforms -- POLITICAL RISK: Spain's political environment is likely to uncertain over the coming years owing to increased fragmentation of the political space since the emergence of anti-establishment parties the far-left Podemos party and previously the centrist Ciudadanos. The Covid-19 crisis has exacerbated polarisation in the country, as well as divisions between the central government and regional authorities. Growing nationalist concerns, first spurred by the Catalonia issue, will support the emergence of other anti-establishment parties such as the far-right Vox. Any government will, therefore, be somewhat constrained in its ability to pursue the necessary economic reforms to boost the country's outlook in the aftermath of the Covid-19 recession in 2020 that are a condition for accessing funds available under the EU's Next Generation recovery fund

1. Política económica . 2. Crecimiento económico . 3. Crisis económica . 4. Perspectivas económicas . 5. Inversiones . 6. Riesgo operacional . 7. Riesgo país . 8. Crisis social . 9. Crisis de la Seguridad Social . 10. España . I. Fitch Solutions . II. Título.