The set of «exceptional» measures implemented to fight the pandemic, namely the «drastic» restrictions to people’s mobility and the shutdown of part of the productive activity, will, according to the bank, «have a severe impact on global economic growth in the short-term».
But there are still some signs of hope: «if this strategy proves itself to be effective to eradicate the infection», the negative effects should be «predominantly transitional», revealed the Banco de España in the Informe Trimestral de la Economía Española (Spanish Economy’s Quarterly Report) issued this Wednesday.
Despite the «the uncertainty concerning the duration and impact of this pandemic crisis over the economy», the bank pointed out that the consequences for the economy will mainly depend on 3 factors: the duration of the implementation of the exceptional measures, the effective decrease in production and spending during the population’s confinement period.
For Banco de España, «the quickness and vigour of the recovery will depend mainly on the economic policies to be implemented in order to mitigate the adverse effects over the economic activity».
Tax policy is, for Banco de España, the first line of defence. Amongst the measures which have already been conceived are the relief of rentals and the waiver of social contributions for companies, so as to avoid dismissals and permanent shutdowns.