What is COVID-19?
Coronaviruses are a family of viruses that normally only affect animals, although they can sometimes be transmitted to people. SARS-CoV-2 is a new type of coronavirus first detected in December 2019, in the Chinese province of Wuhan. This new virus can affect people and produces the disease COVID-19 (infectious disease caused by coronavirus-19).
The Emergency Committee under the International Health Regulations (RSI, 2005) declared the current outbreak of new coronavirus as a public health emergency of international importance (PHEIC) at its meeting on 30 January 2020 and on 11 March the World Health Organization (WHO) raised the situation caused by COVID-19 to the category of global pandemic.
The most common symptoms include fever, cough, and shortness of breath. In some cases there may also be digestive symptoms such as diarrhoea and abdominal pain.
The main vulnerable groups are people aged over 60; those diagnosed with hypertension, diabetes, cardiovascular disease, chronic lung disease or cancer; the immunocompromised; and pregnant people by the precautionary principle.
COVID-19 in the world
All countries are following WHO recommendations and guidelines in their response to the global pandemic.
The European Commission has issued a coordinated economic response to the COVID-19 outbreak. This includes an analysis of the impact of this outbreak, a series of actions already in place, and proposed measures to mitigate harm.
Impact of COVID-19 in Spain
The expansion of COVID 19 is causing a healthcare crisis with an impact on economic sectors. The authorities in Spain are adopting all necessary measures to contain the spread of the virus and mitigate its impact on the national economy. On 14 March a state of emergency was declared throughout Spain.
According to information gathered by the Ministry of Industry, Trade and Tourism, we can expect the following impacts on these areas of activity:
- Tourism is a strategic sector for Spain, providing 12.3% of PIB and 12.7% of employment. While it is still too early to assess the full impact of Covid-19 on the influx of tourists to Spanish destinations in the medium term, the continued healthcare crisis is already having an impact on the sector, due to restrictions on the free movement of people and lower demand for tourism services due to uncertainty and caution.
On 6 March, the World Tourism Organisation (UNWTO) revised its forecast for international tourist arrivals in 2020, lowering them to -1% to -3%, meaning estimated losses of revenue to international tourism of 30 to 50 billion US dollars. Before the COVID-19 outbreak, UNWTO had anticipated positive growth of 3% to 4% for this year.
Spain has experienced other crises and situations of global uncertainty in the past (the financial crisis, the Icelandic volcano, etc), but in the case of COVID-19 and its global expansion, we are witnessing a dramatic rise in travel cancellations, and a steep and increasing decline in short- and medium-term demand for tourism services, both in countries of origin and at destinations, affecting the entire value chain of the Spanish tourist industry.
- It is still too early to know exactly how COVID-19 will impact flows of foreign trade and foreign investment in Spain, since everything will depend on how long the restrictions to contain the disease will remain in place. We know that impact will be significant starting in February (when COVID-19 began spreading in Europe) but we do not know how it will affect the year as a whole, as the magnitude of the impact will depend on how long it takes to halt its expansion. The OECD believes that the epidemic could reduce 2020’s global growth to 2.4%, rather than the 2.9% it forecast in November 2019. These figures help understand why the rapid expansion of coronavirus has meant a “dual shock” to the global economy, which had already been in a period of weak growth. On the supply side, a lack of manpower, strict limitations on mobility within the country, and transportation problems have caused a shortage of raw materials and components, which has broken the global supply chain and has led to factory closures. It is true that, since Chinese industrial activity is gradually returning to normal, some sectors already have the inputs they need in their value chains. On the demand side, the prohibition and forced closure of companies, retail establishments, leisure centres, restaurants, hotels and bars, as well as restrictions on the movement of people (consumers) has caused a steep decline in domestic consumption of both local and imported products.
This demand shock also affects domestic trade. RD 463/2020 does not establish any restrictions on the movement of goods within the territory of Spain. This Royal Decree establishes the shops which are allowed to remain open in order to secure the supply of food and other essential goods. Thus, the effect of coronavirus on retail trade will be asymmetrical, depending on the specific products and services they provide. In any case, it is still too soon to make accurate estimates of retail sales, even in shops which are not allowed to open during the crisis, as the RD on measures in the state of emergency does allow online sales and e-commerce.
- In general, there are no major supply or production problems in the industrial sector, but a considerable economic impact is expected if COVID-19 continues to spread.
Companies in every sector have established contingency plans and are implementing the appropriate protocols established by the healthcare authorities to protect the health of their workers.
In the food and drink sector, businesses are increasing production. Last week, sales increased by 180% in the food and drink sector.
Government measures in response to the COVID-19 crisis
Since the COVID-19 healthcare crisis began, the government of Spain has adopted several measures to provide a comprehensive response to the exceptional effects of the pandemic on the economy, society, and employment.
These actions are contained in the COVID-19 Healthcare Crisis document published in the BOE.
Impact of measures on industry, trade and tourism
Many of the measures adopted have a specific impact on the sectors of industry, trade and tourism, as explained in the following note:
TMA/305/2020 Order, of March 30, amending the annex to TMA/277/2020 Order, of March 23, declaring essential services to certain tourist accommodation and adopting complementary provisions.
The Ministry provides information for citizens on an interactive map.
For more information see the page of the Ministry of Health, Consumption and Social Welfare
For information on measures taken by other ministries
Covid-19 Tourism | 3/25/2020
Covid-19 Industry | 3/23/2020
Covid-19 Trade | 3/19/2020
Covid-19 Trade | 3/18/2020