The Bank of Spain predicts “an intense resumption of productive activity” in the municipalities affected by DANA. The governor of the financial regulator, José Luis Escriva, emphasizes that, based on “the use of the measures and the first available data, we can expect a significant recovery” in the coming quarters.
The impact on the GDP (Gross Domestic Product) of our country as a whole that the Bank of Spain estimates at two tenths – approximately 3 billion euros – of the quarterly growth of the fourth quarter, although Escriva considers that this blow “will be neutralized by other positive trends in recent months” in the rest of the regions. Projections from various international and national institutions have brought GDP growth to 3% in 2024, and above 2% in 2025, leading the main economies of the euro zone.
Over the next year, DANA’s overall impact will reach nearly three-tenths of a percentage point on GDP growth, or nearly $4.5 billion, according to a study of other similar disasters in the past. . At the same time, the effect on inflation will be very limited, almost negligible, according to the same analysis of the Bank of Spain, presented at the 2024 Macroeconomic Information Conference, organized by the Association of Journalists of economic information (APIE).
Escriva delivered an optimistic message about reconstruction, based on economic data monitored by the Bank of Spain. For example, in financial matters, it appears that only “9% of points of sale” in the affected areas were still not operational – or just under 8,000 payment systems – while they reached 15%. .
In the same vein, the volume of payments and the number of banking operations in the almost 80 municipalities affected by DANA are only 4% lower than the average for the rest of Spain.
On the other hand, “daily data on port activity show a considerable drop in the volume of exports from the port of Valencia, while imports are doing better”. In this same sector of activity, the Bank of Spain has calculated a commercial bottleneck index, used for the Katrina disaster in the United States, which reflects a strong initial impact, “which gradually reduces”.
As his presentation to journalists showed, the affected areas in the province of Valencia represent approximately 2% of the national total according to various indicators (population, household income, number of companies, profits of these companies, employment, residential buildings. ..). . Added to this is the greater weight of the industrial sector in the area, which reaches 3%.
For Escriva, the key lies in the large aid program deployed, “mainly by the central government”, and the speed with which affected families and businesses are reached. The governor gave some examples: almost 8,000 moratoriums on requested loans, around 30,000 requests to the Insurance Compensation Consortium and more than 700 requests for ICO guarantees.
Another piece of good news is the 20,000 people already protected by ERTE, or 2% of employment in the province of Valencia, or 1,700 companies in total. But the “work shield” is more extensive, as this information explains.
