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INE Moderates Fall In GDP By 2 Tenths Of Percentage In 2020

The Spanish economy fell 10.8% in 2020 as a result of the impact on the activity of the covid-19 pandemic , according to the data confirmed this Friday by the National Institute of Statistics (INE), which shows a moderation of two tenths with respect to to the decline advanced two months ago (-11%) after evaluating a better performance of private consumption and exports last summer.

The INE has corrected the recession in the Gross Domestic Product (GDP) from -11% estimated in January to -10.8% after incorporating more data from partial indicators on economic activity into its analysis. The decline of 10.8% continues to be, in any case, the deepest since there are statistical records and, in any case, since the Civil War . The previous biggest drop in activity, of 3.8%, occurred in 2009.

The public deficit rises to 7.8% of GDP in November, five times that of 2019
The revision of the data published this Friday affects each of the four quarters of 2020. Now the INE estimates that GDP grew considerably more during the summer and that in the last quarter it stagnated. The data now point to a better performance of private consumption and exports of goods and services during the summer and a stagnation of household spending in the fourth quarter.

Improves the third trimester and worsens the fourth
According to the new forecasts, GDP grew in the third quarter by 17.1% compared to the second quarter, six tenths more than in the previous estimate, of 16.4%. In addition, the indicators indicate that the economy stagnated in the fourth quarter (with a zero advance of 0.0% compared to the third), instead of the advance of 0.4% previously estimated.

Thus, the new quarterly sequence for 2020 chains variations of -5.4%, -17.8%, 17.1% and 0.0% that result in a 10.8% drop in GDP as a whole of the year. (In the previous sequence there were rates of -5.3%, -17.9%, 16.6% and 0.4% with a fall of 11% for the whole of 2020)

In this fall in GDP in 2020, which breaks with six consecutive years of growth , national demand (consumption and investment) was responsible for 8.8 of the 10.8 points of the contraction, while the negative contribution of demand external (exports and imports) was 2 points.

Less hours worked and less employment
Employment in the economy, in terms of hours worked, registered a quarter-on-quarter variation of 1.0% in the last four months of the year. This rate is smaller in the case of full-time equivalent jobs (1.2%, which is 14.9 points less than in the third quarter) due to the reduction observed in average hours full time (−0.2%).

In year-on-year terms, hours worked in the fourth quarter decreased 6.1%, a rate three tenths higher than in the third quarter of 2020, and full-time equivalent jobs decreased 5.2%, four tenths more than in the third quarter of 2020. third quarter, which means the loss of some 962,000 full-time equivalent jobs in one year.

The interannual variation of the unit labor cost this fourth quarter stood at 4.9%. Gross national income and gross national disposable income grew 0.6% and 0.1%, respectively, compared to the previous quarter. In relation to the fourth quarter of 2019, national income fell 7.7% and national disposable income 8.2%.

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