- 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 (RHI, 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 GDP
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 early to know the impact that will have the health crisis caused by the Covid-19 flows of foreign trade and foreign investment in Spain, since it will depend on the severity and duration of the pandemic and how much should be extended restrictions to contain the disease, as well as the ability economic policy measures being taken to mitigate its impact on the economy. We know that impact will be significant since March (when it began to spread the COVID-19 in Europa) but we know how to affect the whole year, because there is still uncertainty about the time that will be necessary to control their expansion, both in Spain, as in the rest of our trading partners.
The IMF believes that the global economy will shrink 3% in 2020, since a growth of 3.3% expected in January this year. The own IMF recognizes that their forecasts are subject to a degree of uncertainty much higher than usual and it is very likely that should be revised as clarifying the scope of the crisis. In any case, these figures help understand why the rapid expansion of coronavirus has been a negative shock unprecedented for the global economy, which had already been a weak growth phase.
Strict confinement necessary to contain the pandemic, proceeded to the economy to a period of hibernation in which much of economic and commercial activity must stop. Inevitably this restriction of economic activity reduces the ability of businesses to export, import and make new investments. This extends to, in some cases, the difficulty in accessing some raw materials and components from abroad. Limitations on national and international mobility very directly to services such as transport and tourism. Furthermore, the restriction on the movement of people (consumers) has caused a sharp decline in consumption, both local products as imported. Furthermore, the fall in revenue caused by the crisis will lead to a further weakening of consumption and investment, both of goods and services Spaniards as from the rest of the world.
The WTO expects a fall of global merchandise trade derivative of the health crisis between 13% and 32% this year, according to a report published on 8 April. For Europa, this study provides in 2020 a drop in exports from 12% and imports from 10% in the optimistic scenario, and 33% and 30%, respectively, on stage pessimistic. Also, suggests that it is likely that trade fall with greater force in sectors with complex value chains, particularly electronics and automotive products, as well as services, which are more directly affected by transport restrictions and travel.
For its part, the UNCTAD believes that flows of foreign direct investment could be reduced between 30% and 40% during 2020-2021.
This downturn also affects the internal trade. The Royal Decree 463/2020 makes no restrictions on the movement of goods within the Spanish territory. Also, the Royal Decree establishes the shops can open its doors to guarantee the supply of basic goods and high consumption. Therefore, the effect of coronavirus in sales retail will be asymmetrical depending on the specific products and services marketed and the possibility of conducting commerce. The Royal Decree of measures under the rule of alarm yes that allows the sale online or electronic commerce, even in the shops that could not open to the public during the crisis. In any case, it is soon to make estimates on the evolution of sales in trade.
- Tourism is a strategic sector for Spain, providing 12.3% of GDP 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.
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.
Specific measures to companies, SMEs and the Self-Employed
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:
Impact of COVID-19 in industry, trade and tourism
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 | 9/3/2020
Covid-19 Industry | 9/3/2020
Covid-19 Industry | 8/12/2020
Covid-19 Tourism | 8/10/2020