BNY Mellon: There are reasons to be optimistic about the Spanish economy

Written by Sebastian Vismara, Director of Investment Strategy at BNY Mellon Investment Management

Short-term prospects for the Spanish economy getting better. Thanks to a higher vaccination rate, higher temperatures, which are less conducive to the spread of the virus, and the gradual lifting of virus-related restrictions since the beginning of May, the economy appears to be underway. It will bounce strong In the second half of the year. There is still a long way to go for the ECB to change its stance on expansionary monetary policy and the institution does not seem to be concerned about the situation at the moment. The recent rise in inflationary pressures.

It will take time for the Spanish economy to return to pre-pandemic levels of activity and it may be Never regain the trend level it was in before the crisis. However, thanks to the European Recovery Fund, there are reasons for that Optimistic about the prospects for the Spanish economy long-term. Europe has a unique opportunity to boost the growth of the entire region, and Spain in particular, while Promotes Greater economic affinity.

There is no doubt that it still exists Challenges. Despite the decrease in infections in Spain and Europe and the possibility of tourists who meet certain requirements (for example, who have been vaccinated) travel to the countries of the European Union Chances of a more natural tourist season improve this summerThe situation remains uncertain and could change quickly.

Virus can يمكن Appear or mutate And vaccines may be less effective than we think. As the recent surge in Covid-19 cases in the UK shows, lifting restrictions when residents are only partially vaccinated could mean risk. On the other hand, inflation could rebound earlier or more intensely than expected and the ECB could act preemptively. Surprise Markets and slowing recovery prematurely.

Although they are serious risks that we have to monitor closely, the possibility of each of them occurring separately is still less likely. The most likely scenario we have described.