July 15, 2020

Coronavirus. Balearic Islands, the Canary Islands and Catalonia, the economies hardest hit by the state of alarm



The measures adopted by the different autonomous administrations according to the regulations set by the Government after the declaration of the alarm status to limit the uncontrolled expansion of those affected by coronavirus pandemic going to represent a economic and social cost for Spain. In a first analysis on the question, the Center for Economic Prediction (Ceprede) It has estimated that assuming that the duration of the state of alarm is four weeks, the national GDP will contract 1.7%, causing a loss of some 300,000 jobs. Going down in detail by region, this economic analysis center considers that The Balearic Islands, the Canary Islands and Catalonia will be the communities most affected by the partial paralysis of activity caused by the state of alarm, with setbacks in their wealth of 2.7%, 2.1% and 1.9%, respectively.

According to Ceprede, “the Balearic Islands and the Canary Islands will foreseeably show the greatest fall in consumption, both of national and international origin and directly linked to the most present tourist activity on their map of productive activity.” But also Catalonia, Madrid (-1.8%), the Valencian Community (-1.8%) and La Rioja (-1.8%) “could exceed the average values ​​attributed to the Spanish economy as a whole, acting as factors decisive in all of them is the decline in dynamism expected in business services, including real estate or advertising, along with services provided to homes and recreational, sports and cultural services, ”explains Ceprede in its analysis. Extremadura (-1.3%) and Asturias (-1.4%) would be the communities that would best weather the storm according to the study.

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In terms of employment, Catalonia is the region with the worst stop in the projections of the center, with a destruction of 60,000 jobs. It is a region, according to Ceprede, in which commerce, hospitality and business services stand as the main drivers of the evolution of its labor market, concentrating approximately 67.4% of the estimated losses, a percentage similar to that expected in Andalusia, third enclave of maximum decreases (46,200). In the Community of Madrid (-52,000 jobs), this sectoral trilogy would affect 71.3% of the estimated job losses. In the Valencian Community (-31,800 jobs), the notable contraction of employment in the textile industry joins these sectors, accounting for an aggregate reduction of employment close to 23,650 jobs, which represent 74.3% of the total estimated losses for this region.

To carry out its analysis, Ceprede has assumed that the state of alarm would suppose a complete paralysis of the expenses in private consumption destined to vehicles, accommodation and hospitality, travel agencies, education, artistic services and shows, and sports and recreational services. For the demand for industrial products, as well as maritime and air transport services, a containment percentage of 80% has been assumed, while for commercial services, both wholesale and retail, the percentage has been calculated. that represent the products affected by the “I stay at home.”

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