Post by account_disabled on Mar 16, 2024 0:41:34 GMT -5
Rodolfo Rieznik | The pandemic crisis has had a dramatic impact on all indicators of the Spanish economy, and also the world economy. The forecasts for the evolution of economic activity could not be more gloomy. We do not yet have definitive annual data, only a trickle of quarterly figures, from which annual percentages are projected. In the case of the Spanish economy, we would be experiencing GDP declines close to % of the annual gross product in The Gross Domestic Product measures in monetary terms, not in physical volume, the productive activity of a country in a period of time. The restrictions imposed on population mobility due to the coronavirus disease have had an extraordinary impact on families' ordinary consumption spending. Consumption represents between % and % of GDP. Furthermore, companies, faced with the consumer depression, have not invested nor are they in a position to amortize their facilities, nor have they considered expanding into new equipment.
In this way, the investment falls apart. Without consumption and without investment, companies shed workers, employment collapses and, logically, demand is reduced and thus sales and profits. This is how the negative court circle of the economy is being reproduced. Socially, it is evident that the groups hardest hit by this situation globally are employees in most sectors of the economy, self-employed workers, including those in culture and entertainment, and small businesses. That is to say, the most affected are all those whose daily lives are only sustained by AOL Email List the income from their work, formal and informal. Inequality and poverty, in this bleak panorama, can only increase. This is what the statistics are collecting. The Government has implemented urgent social policies to partially address these circumstances in a timely manner, with employment regulation files, ERTES, expansion of unemployment insurance, minimum income, IMV, credit guarantees for companies, etc.
All of this will end up having a huge impact on public spending, which will be added to the increases in other expenses prompted by the outbreak of the pandemic, among others, health and educational expenses. The State, either with its own resources, with debt or with external aid such as that announced by the European Union, must finance all this extraordinary expenditure. The Government counts on supporting it with the taxes it collects, either by taxing the income and consumption of people and companies, or by taxing the accumulated wealth of citizens. With consumption and investment in free fall, revenue will be seriously affected. The contraction, in short, of national income, mentioned above, will have an impact on tax revenues. Furthermore, unemployment will reduce the contributions of active workers, adding another deficit front to the social well-being of the passive classes.
In this way, the investment falls apart. Without consumption and without investment, companies shed workers, employment collapses and, logically, demand is reduced and thus sales and profits. This is how the negative court circle of the economy is being reproduced. Socially, it is evident that the groups hardest hit by this situation globally are employees in most sectors of the economy, self-employed workers, including those in culture and entertainment, and small businesses. That is to say, the most affected are all those whose daily lives are only sustained by AOL Email List the income from their work, formal and informal. Inequality and poverty, in this bleak panorama, can only increase. This is what the statistics are collecting. The Government has implemented urgent social policies to partially address these circumstances in a timely manner, with employment regulation files, ERTES, expansion of unemployment insurance, minimum income, IMV, credit guarantees for companies, etc.
All of this will end up having a huge impact on public spending, which will be added to the increases in other expenses prompted by the outbreak of the pandemic, among others, health and educational expenses. The State, either with its own resources, with debt or with external aid such as that announced by the European Union, must finance all this extraordinary expenditure. The Government counts on supporting it with the taxes it collects, either by taxing the income and consumption of people and companies, or by taxing the accumulated wealth of citizens. With consumption and investment in free fall, revenue will be seriously affected. The contraction, in short, of national income, mentioned above, will have an impact on tax revenues. Furthermore, unemployment will reduce the contributions of active workers, adding another deficit front to the social well-being of the passive classes.