José Luis Escrivágovernor of Bank of Spainpredicted that the economic impact of DANA would be two tenths of gross domestic product (GDP) for the fourth quarter of the year and 0.15 percentage point of inflationin this case long term.
More than twenty days have passed since DANA’s torrential rains hit 78 municipalities of the Valencian Community, Castile-La Mancha and Andalusia, a region inhabited by approximately 2% of the population.
And the possible economic consequences of this disaster are now beginning to be estimated. Regarding the economic activity of the entire country, the Bank of Spain estimates that it will subtract two tenths from the GDP of the fourth quarter, Escriva said during his speech at a conference organized by the Association of Economic Information Journalists (APIE).
Europe Press
Madrid
According to experts from the Bank of Spain, “empirical evidence indicates a limited and temporary impact on GDP” of this natural disaster.
This will also have an impact on inflation, although this is more difficult to assess, as the governor explains. Of the institution they plan an increase of 0.15 percentage points in the long term and they cannot specify more, according to Escriva. “It’s a minor impact”spoke of the possible growth of inflation following this disaster.
37 agencies remain closed
The governor also provided data on the impact of this DANA on the financial system. More specifically, he explained that 37 of 298 bank branches are still not operational12.4% of the total, even if normality is gradually returning.
The bank’s exposure to these municipalities concerned amounts to 20.584 million euros, or 1.8% of the total credit.corresponding to loans which have 561,210 holders.
Of the total, 10,047 million correspond to mortgages; 1.903 million consumer credits; 4.269 million to SMEs and 2.773 million to large companies.
