Overview of the economic situation Q2 2020 The Covid-19 crisis has had one of the biggest economic impacts of our recent history The lockdown measures to contain the spread of the virus have generated an unprecedented economic standstill. In this context, international organizations (the IMF, OECD, World Bank and European Commission) are forecasting a contraction of GDP of around 3 annually for 2020 a decrease of world trade higher than that of 2008 a breakdown of numerous value and supply chains globally, and a record increase of unemployment among many other things. At the same time, it is expected that the spread of the virus will be contained in the second half of 2020 and activity will gradually restart. The economic impact of Covid-19 in the first months of 2020 has been evident in advanced economies (Europe and US), as a result of being the main focal points for the spread of the virus. On top of the standstill some countries economic stimulus packages are limited as a result of the scarce room for maneuver available to them (very low interest rates and high levels of public debt). US the country with the greatest number of confirmed cases of the coronavirus in the world, has seen the longest period of expansion in its history come to an end with a decrease in GDP forecast to be above 7 annually. In the Eurozone, a sharper decrease of GDP is expected, with an expansive response by the ECB and one involving the launch of fiscal stimulus packages by authorities somewhat later. In emerging economies the impact of the coronavirus is also having a considerable effect and in some countries, a certain acceleration of the spread of the virus is taking place (in Brazil and Russia). This situation, together with the tightening of financial conditions and the collapse of external demand could lead to substantial macroeconomic imbalances (especially in economies that have a high level of foreign debt).

1. Perspectives on the Spanish
and global economies
Q2-2020
June 2020
QUARTERLY REPORT

2. GLOBAL

3. Overview of the economic situation
3
Source: Círculo de Empresarios, 2020.
The Covid-19 crisis has had one of the biggest economic impacts of our recent history. The lockdown
measures to contain the spread of the virus have generated an unprecedented economic standstill. In this
context, international organizations (the IMF, OECD, World Bank and European Commission) are forecasting a
contraction of GDP of around 3% annually for 2020, a decrease of world trade higher than that of 2008, a
breakdown of numerous value and supply chains globally, and a record increase of unemployment, among
many other things. At the same time, it is expected that the spread of the virus will be contained in the second
half of 2020, and activity will gradually restart.
In emerging economies, the impact of the coronavirus is also having a considerable effect, and in some
countries, a certain acceleration of the spread of the virus is taking place (in Brazil and Russia). This situation,
together with the tightening of financial conditions and the collapse of external demand, could lead to
substantial macroeconomic imbalances (especially in economies that have a high level of foreign debt).
The economic impact of Covid-19 in the first months of 2020 has been evident in advanced economies
(Europe and US), as a result of being the main focal points for the spread of the virus. On top of the standstill,
some countries economic stimulus packages are limited as a result of the scarce room for maneuver available
to them (very low interest rates and high levels of public debt). US, the country with the greatest number of
confirmed cases of the coronavirus in the world, has seen the longest period of expansion in its history come to
an end, with a decrease in GDP forecast to be above 7% annually. In the Eurozone, a sharper decrease of
GDP is expected, with an expansive response by the ECB, and one involving the launch of fiscal stimulus
packages by authorities somewhat later.

4. Global economic trends
4
Source: Círculo de Empresarios, 2020.
Synchronized slowdown
Deterioration of global trade due to the continuity
of the trade war (US – China)
90% of economies are experiencing a slowdown of their
GDP.
The Fed has cut interest rates for the first time in 11 years.
Industrial stagnation
In the Eurozone, the industrial sector has been in a
period of contraction since the end of 2018.
Social and geopolitical conflicts at a global level
1
2019 2020
3
4
5
(Trade war, Hong Kong, Iran and South America).
2
The appearance
of Covid-19
1
3
4
5
2 Economic recession
In 2020, a fall in GDP of around 3% annually is expected.
The collapse of international trade
In a pessimistic scenario, trade could fall by up to 32%
annually.
Authorities are taking decisive action to
reactivate the economy
Lockdown measures to contain the spread of the
pandemic have led to a world economic standstill.
Spread of the epidemic on a global scale
These fiscal and monetary measures will lead to
important increases in public debt and deficit.
Historic destruction of jobs
Unemployment is rising to levels not previously seen
since World War II.
Flexible monetary policy

5. Covid-19 spreads on a global level
Source: Círculo de Empresarios based on OECD and Bloomberg, 2020.
5
Evolution of Coronavirus cases
Thousands of people
Global incidence of Coronavirus
3rd June
Spain Italy UK France US Brazil China
4,829.3
51.0
cases/million
546.0
deaths/million
tests/1.000
3,746.1
537.9
62.7
4,269.6
602.9
65.5
2,791.4 5,546.5 2,612.8 59.7
428,1 321.5
-
3.3
51.3
146.8
2.3 -
Not
declared
at national
level
Covid-19 originated in China, with the main focal points
of the epidemic later switching to Europe and US. There
have been more than 5.5 million cases, and it has
started to spread to other regions.
National isolation
Mar-14 Mar-10 Mar-23 Mar-17
0
1000
2000
3000
4000
5000
6000
Jan-20
Jan-20
Feb-20
Feb-20
Feb-20
Feb-20
Mar-20
Mar-20
Mar-20
Mar-20
Apr-20
Apr-20
Apr-20
Apr-20
May-20
May-20
May-20
May-20
China France
United Kingdom Italy
Spain Brazil
US Rest of the world
Not
declared
at national
level
Not
declared
at national
level

6. Economic recession on a global level
Source: Círculo de Empresarios based on IMF, 2020.
6
Evolution of World GDP
Q4 2019 = 100
The IMF forecasts a 3% contraction of GDP as a result of the Covid-19 crisis.
Evolution of World GDP
YoY change (%) and growth contributions
Although a rapid recovery is expected, economic activity will not reach previously projected levels.
-4
-3
-2
-1
0
1
2
3
4
5
6
7
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Advanced economies Emerging markets
World
90
95
100
105
110
115
2019 2020 2021 2022 2023
Current forecast of global growth
Last forecast

7. Eurozone
China
Source: Círculo de Empresarios based on IMF, 2020.
7
2020 2021
Japan
UK
US Brazil
2020 2021
Argentina
Turkey
2020 2021
2020 2021
2020 2021
2020 2021
2020 2021
2020 2021
-5.9 4.7
-7.5 4.7
-6.5 4.0
1.2 9.2
-5.0 5.0
-5.7 4.4
-5.3 2.9
-5.2 3.0
Advanced
2020 2021
-6.1 4.5
Emerging
2020 2021
-1.0 6.6
Forecasts revised downwards
India
2020 2021
1.9 7.4
-8.0
-7.9
-7.3
-8.0
-4.4
-4.6
-5.1
-5.7
-8.9
Forecast revisions
January 2020 (pp)

8. May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20
Germany 44.3 45 43.2 43.5 41.7 42.1 44.1 43.7 45.3 48 45.4 34.5 36.6
France 50.6 51.9 49.7 51.1 50.1 50.7 51.7 50.4 51.1 49.8 43.2 31.5 40.6
Italy 49.7 48.4 48.5 48.7 47.8 47.7 47.6 46.2 48.9 48.7 40.3 31.1 45.4
US 50.5 50.6 50.4 50.3 51.1 51.3 52.6 52.4 51.9 50.7 48.5 36.1 39.8
Spain 50.1 47.9 48.2 48.8 47.7 46.8 47.5 47.4 48.5 50,4 45.7 30.8 38.3
UK 49.4 48 48 47.4 48.3 49.6 48.9 47.5 50 51.7 47.8 32.6 40.7
Japan 49.8 49.3 49.4 49.3 48.9 48.4 48.9 48.4 48.8 47.8 44.8 41.9 38.4
China 49.4 49.4 49.7 49.5 49.8 49.3 50.2 50.2 50 35.7 52 50.8 50.6
India 52.7 52.1 52.5 51.4 51.4 50.6 51.2 52.7 55.3 54.5 51.8 27.4 30.8
Brazil 50.2 51 49.9 52.5 53.4 52.2 52.9 50.2 51 52.3 48.4 36 38.3
World 49.8 49.4 49.3 49.5 49.7 49.8 50.3 50.1 52.2 47.1 47.3 39.6 42.4
PMIs collapse in 2019-20
Source: Círculo de Empresarios based on Markit, 2020.
8
Confidence falls to minimum levels in most economies due to the lockdown measures.
Manufacturing PMI
50=threshold (a value above 50 represents an expansion)
Note: The JP Morgan Global Manufacturing PMI has been used to calculate the global data.
67%ofworldGDP

9. -40
-20
0
20
2020 2021
Optimistic scenario Pessimistic scenario
World trade deteriorates
Source: Círculo de Empresarios based on WTO and CPB Netherlands Bureau for Economic Policy Analysis, 2020.
9
In March, according to the World Trade Monitor, the volume of world trade shrank 4.3%, its biggest
fall since 2009.
In 2020 the WTO forecast that world
trade could decrease 32% annually
in a pessimistic scenario.
Forecasts, evolution of trade (WTO)
YoY change (%)
Evolution of world trade
(%)
60
70
80
90
100
110
Jun-19 Apr-20
30
40
50
Jun-19 Apr-20
20
30
40
50
Jun-19 Apr-20
Trade expectations
Points
Germany, IFO business
expectations index
USA, ISM export order
expectations index
China, PMI export order
expectations
-25
-20
-15
-10
-5
0
5
10
15
20
25
Mar-01
Mar-02
Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
YoY change
QoQ change

10. 0 0,5 1 1,5 2 2,5
China
Australia
South Korea
Poland
Russia
UK
India
Hong Kong
Brazil
Canada
US
Norway
Mexico
Turkey
Official interest rates reduced
Source: Círculo de Empresarios based on Oxford economics, 2020.
10
The response by Central Banks to the crisis has been to cut interest rates drastically in a bid to
counter the effects of the pandemic.
The decreased margin for reducing interest rates in advanced economies has forced them to complement these
measures with programs involving the mass purchase of assets (QE).
Official interest rates
(%)
Official interest rate cuts during the Covid-19 crisis
Percentage points
The ECB and Central Bank of
Japan have maintained their
official interest rates at 0% and
-0.1%, respectively.4
5
6
7
8
9
-1
0
1
2
3
4
5
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
Advanced economies
Emerging markets (right axis)

11. Fiscal policy and world debt
Governments put together economic stimulus packages to reactivate the economy after the lockdown.
Source: Círculo de Empresarios based on Oxford Economics and BIS, 2020.
Fiscal stimulus packages
% of GDP
11
Evolution of non-financial debt
% of GDP
Fiscal expansion will create pressure by raising debt levels. In the past 10 years, the non-financial debt on a world
scale has increased 42 pp, reaching 221% of GDP.
Note: fiscal stimulus calculated as an increase of the public debt (reduction of the surplus) as % of GDP.
-3
-2
-1
0
1
2
3
4
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Advanced economies Emerging markets World
150
160
170
180
190
200
210
220
230
0
50
100
150
200
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Household debt Business debt
Public debt % of GDP (right axis)

12. Emerging economies: high levels of debt
The deterioration of financial and macroeconomic conditions on a global scale (appreciation of the dollar, the
slump in foreign demand, the increase of risk premiums) weaken emerging economies.
Source: Círculo de Empresarios based on IIF and Oxford Economics, 2020.
Foreign capital flows to emerging economies
Billions of $
12
Evolution of foreign debt
% of GDP
The high level of foreign debt is one of the main vulnerabilities of these economies.
-120
-100
-80
-60
-40
-20
0
0 10 20 30 40 50 60 70 80
Financial crisis China crisis
Taper tantrum Covid-19
0
20
40
60
80
100
120
140
160
180
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Argentina Hungary Poland South Africa Turkey

13. China ditches growth objective for 2020
Source: Círculo de Empresarios based on Oxford Economics, 2020.
13
Compared to what is expected in most economies, it
is estimated that the impact will be centered in Q1
2020, with rapid recovery in the following quarters.
Quarterly GDP
YoY change (%)
For 2020, the Chinese GDP is expected to slow down around 1.6% yearly as a result of the impact
of the coronavirus, compared to the previously estimated 6%.
Consumption and household income
YoY change (%)
Oxford Economics forecasts
YoY change(%)
2019 2020 2021
Domestic demand 5.7 1.6 7.9
Private consumption 6.9 -1.5 11.5
Investment 4.4 1.7 5.8
Government consumption 7.7 10.0 4.2
Exports of goods and services 2.5 -9.9 10.9
Imports of goods and services -0.4 -6.7 11.0
GDP 6.1 0.8 8.5
Annual inflation 2.9 2.9 1.6
Current account balance ($ bn) 425.3 329.0 464.7
-15
-10
-5
0
5
10
15
20
Q1
2007
Q1
2008
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
2014
Q1
2015
Q1
2016
Q1
2017
Q1
2018
Q1
2019
Q1
2020
Q1
2021
QoQ change (%) YoY change (%)
-10
0
10
Q1
2015
Q3
2015
Q1
2016
Q3
2016
Q1
2017
Q3
2017
Q1
2018
Q3
2018
Q1
2019
Q3
2019
Q1
2020
Household income Private consumption

14. China: recovery in Q2 2020
Source: Círculo de Empresarios based on Oxford Economics, 2020.
14
The slump in industrial activity in China has most affected
cities such as Tianjin, Sichuan or Guangdong as a result of
the greater concentration of this sector in these areas.
Key cyclical indicators
YoY change (%)
After the slump in Q1 2020, economic activity has begun to recover.
Coal Consumption
Thousand tonnes
Major Chinese cities: sectorial share, 2019
% of GDP
-25
-20
-15
-10
-5
0
5
10
15
20
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Value added industry Fixed asset investment Retail sales
300
400
500
600
700
800
900
12-Dec
19-Dec
26-Dec
2-Jan
9-Jan
16-Jan
23-Jan
30-Jan
6-Feb
13-Feb
20-Feb
27-Feb
5-Mar
12-Mar
19-Mar
26-Mar
2-Apr
9-Apr
16-Apr
23-Apr
30-Apr
7-May
14-May
2017 2018 2019 2020
Chinese New Year
(25th of January, 2020)
0
10
20
30
40
50
60
70
Tianjin Sichuan Guangdong China Shanghai Beijing
Share of services sector Share of industry

15. China: foreign sector weakness
Source: Círculo de Empresarios base on Oxford Economics, 2020.
15
External sector, China
YoY change (%)
Current account balance
% of GDP
-4
-2
0
2
4
6
8
10
12
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Primary and secondary income
Services balance
Goods balance
Current account balance
Oxford Economics
forecast
Exports of goods and services shrank in Q1 2020. In a context of paralysis of foreign demand, it is
estimated that exports will continue to weaken.
Current account surplus retains its downward trend in light of a decrease in the goods trade balance.
-25
-20
-15
-10
-5
0
5
10
15
20
Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020
Exports of goods and services
Imports of goods and services

16. Latin America: economic forecasts
Source: Círculo de Empresarios based on IMF, 2020. 16
GDP evolution
YoY change (%)
In 2020, the GDP of Latin American economies deteriorated due to the impact of Covid-19.
However, perspectives for 2021 are positive for major countries of the region.
0.1
-5.2
3.4
2019 2020 2021
LATAM
-2.2
-5.7
4.4
-8
-4
0
4
2019 2020 2021
1.1
-5.3
2.9
-8
-4
0
4
2019 2020 2021
1.1
-4.5
5.3
2019 2020 2021
3.3
-2.4
3.7
2019 2020 2021
-0.1
-6.6
3.0
2019 2020 2021
Mexico
2.2
-4.5
5.2
2019 2020 2021
Argentina Chile
Brazil Colombia Peru
Previous forecast Current forecast

17. 40
50
60
70
80
90
100
-12
-10
-8
-6
-4
-2
0
2
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Government deficit Government debt (right axis)
-20
-10
0
10
20
30
Q12013
Q32013
Q12014
Q32014
Q12015
Q32015
Q12016
Q32016
Q12017
Q32017
Q12018
Q32018
Q12019
Q32019
Q12020
Q32020
Q12021
Q32021
Private consumption
Investment
Brazil: the worst affected Latin American country
Source: Círculo de Empresarios based on Oxford Economics, 2020. 17
GDP evolution
YoY change (%)
Brazil is the second country in the world and the first in Latin America with the most Covid-19 cases, more than
500,000. If the situation continues to worsen, its GDP could fall around 11.5% year-on-year.
1 It contemplates a longer duration of the economic impact and more intense
repercussions in the financial market.
2 It considers the impact on the world economy and asset prices as a result of the
deterioration of the global manufacturing sector, that will in turn increase family
savings.
Private consumption and investment
YoY change(%)
Government debt and deficit
% of GDP
Oxford Economics
Estimates that
every extra day of
social distancing is
in vigor, results in a
reduction of family
consumption of
0.3% and GDP of
0.2%.
-11.5
-5.5
-12
-10
-8
-6
-4
-2
0
2
4
2014 2015 2016 2017 2018 2019 2020 2021
Current forecast
Coronavirus pandemic downside¹
Global recession²
Global trade war

18. -10.5
8.8
-11
-8
-5
-2
1
4
7
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
2014
Q1
2015
Q1
2016
Q1
2017
Q1
2018
Q1
2019
Q1
2020
Q1
2021
Mexico: Covid-19 blow to the economy
Source: Círculo de Empresarios based on Banxico and Oxford Economics, 2020. 18
Quaterly GDP
YoY change (%)
The lockdown measures, social distancing and economic stagnation due to the pandemic will
seriously affect quarterly GDP in 2020, with greater decreases than those of 2009.
Forecast
Workers remittances
YoY change (%)
Unemployment rate
% of active population
-60
-40
-20
0
20
40
60
80
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
A reduction in the unemployment rate is forecast for 1Q 2020 due to
decreased labor participation. At the same time, in March, workers
remittances (mostly from US) increased 35.8% year-on-year, the highest
level since December 2003 (45.9%).
3
4
5
6
7
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
2014
Q1
2015
Q1
2016
Q1
2017
Q1
2018
Q1
2019
Q1
2020
Q1
2021

19. Source: Círculo de Empresarios based on Oxford Economics, 2020.
US: the end of its longest period of expansion
GDP evolution in previous crises
Crisis = 100
2021
2.3 -7.0 8.6
20202019
19
In Q1 2020, American GDP contracted 1.2% quarterly, its worst figure since the financial crisis of
2008, and the seventh biggest fall in the past 70 years.
Real GDP forecasts
%
Consecutives moths of expansion
Moths
-1.2
Q1 20 Q2 20 Q3 20 Q4 20
-10.8 1.4 4
39
24
106
36
58
12
92
120
73
128
0
40
80
120
1954 1958 1961 1970 1975 1980 1982 1991 2001 2009
Jun2009-Feb2020
Lockdown measures and the paralysis of
the economy will cause a more severe
recession than those of previous crises.
Oxford Economics forecast
85
90
95
100
105
Crisis
+Q1
+Q2
+Q3
+Q4
+Q5
+Q6
+Q7
+Q8
+Q9
+Q10
+Q11
+Q12
+Q13
+Q14
Nov-73 Jul-81 Jul-90
Mar-01 Dec-07 Mar-20

20. Source: Círculo de Empresarios based on Oxford Economics and Economic Policy Uncertainty, 2020.
20
US: a worsening of the crisis in Q2 2020
Economic Uncertainty index, US
Points
A more severe decline of GDP is expected with a fall in private consumption greater than 15%.
Evolution of demand components
YoY change (%)
The Covid-19 crisis places uncertainty at maximum levels, greater than those of the 2007 crisis.
-25
-20
-15
-10
-5
0
5
10
Q1
2007
Q1
2008
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
2014
Q1
2015
Q1
2016
Q1
2017
Q1
2018
Q1
2019
Q1
2020
Pivate consumption Exports Investment
0
50
100
150
200
250
300
Jun-85
Aug-87
Oct-89
Dec-91
Feb-94
Apr-96
Jun-98
Aug-00
Oct-02
Dec-04
Feb-07
Apr-09
Jun-11
Aug-13
Oct-15
Dec-17
Feb-20

21. 131
125
130
135
140
145
150
155
Apr-00
Apr-01
Apr-02
Apr-03
Apr-04
Apr-05
Apr-06
Apr-07
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Source: Círculo de Empresarios based on US Bureau of Labor Statistics, 2020.
21
US: a severe impact on the job market
Monthly evolution of employment
Millons of jobs
Employment in US registered its biggest fall in one month of its history, falling to 2009 levels, driving up its
unemployment rate to 14.7%.
By sector, the destruction of employment has hit hardest in the leisure and hospitality sectors.
Employment destruction sector, April 2020
Millons of workers
0 2 4 6 8
Leisure and hospitality
Education and health
Professional services
Retail
Social care
Construction
Durable goods
Logistics
Wholesale
Financial activities
Information
Mining

22. Source: Círculo de Empresarios based on US Bureau of Labor Statistics, 2020.
22
US: a sharp drop in inflation
The economic standstill and overproduction of crude oil has reduced inflation to 0.3% annually,
reaching 2015 levels.
Inflation indicators
YoY change (%)
By comparison, average salary growth has picked up significantly, mostly due to the fact that the destruction of
employment is concentrated on low-wage positions.
Average salary growth ($/h)
YoY change (%)
7.9
0
1
2
3
4
5
6
7
8
Apr-08
Apr-09
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
-30
-20
-10
0
10
20
30
40
50
-1
0
1
2
3
4
5
Apr-10
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
Oct-19
Apr-20
CPI Food Energy (right axis)

23. 40
50
60
70
80
90
100
110
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Public debt US
Business debt
Household debt
Source: Círculo de Empresarios based on BEA and Oxford Economics, 2020.
23
US: fiscal stimulus, deficit and debt
In March, the US Senate approved the largest fiscal stimulus package in its history ($2 billion) in an
attempt to counter the effects of the pandemic.
Evolution of non-financial debt
% of GDP
-30
-25
-20
-15
-10
-5
0
5
2000 2003 2006 2009 2012 2015 2018 2021
Evolution of public deficit
% of GDP
Fiscal stimulus by country
% of GDP
The fiscal stimulus package will have a negative impact
on fiscal consolidation and the sustainability of public
debt in the future.
Recession
Recession
0
5
10
15
20
25
Japan US Australia Canada Brazil Germany India China

24. 0
2
4
6
8
Aug-07
Jun-08
Apr-09
Feb-10
Dec-10
Oct-11
Aug-12
Jun-13
Apr-14
Feb-15
Dec-15
Oct-16
Aug-17
Jun-18
Apr-19
Feb-20
QE I QE II QE III
24
US: monetary stimulus by the Fed
Source: Círculo de Empresarios based on Bloomberg and Fed, 2020.
With the aim of countering the effects of the pandemic, the Fed has reduced rates to zero and
announced asset purchases with “no limits for as long as necessary”.
Fed balance sheet
Trillions of $
Official Fed interest rate
%
Monetary Policy
Standardization
The Federal Reserve Bank of New York, responsible for implementing the Fed’s monetary policy, has announced the
purchase of $75 billion Treasury Securities each day and $50 billion of mortgage-backed securities.
*QE= massive purchase of assets by central banks.
0
1
2
3
4
5
6
7
Q12000
Q22001
Q32002
Q42003
Q12005
Q22006
Q32007
Q42008
Q12010
Q22011
Q32012
Q42013
Q12015
Q22016
Q32017
Q42018
Q12020
Q22021

25. Eurozone: GDP collapse
Source: Círculo de Empresarios based on Oxford Economics, 2020. 25
The exceptional measures to deal with Covid-19 have paralyzed Eurozone economies and a sharp
decline of GDP is expected in Q2 2020.
Economic growth
QoQ change (%)
Eurozone FranceGermany
Italy SpainNetherlands
-14
-10
-6
-2
2
2006 2008 2010 2012 2014 2016 2018 Q2
2020
-14
-10
-6
-2
2
2006 2008 2010 2012 2014 2016 2018 Q2
2020
-14
-10
-6
-2
2
2006 2008 2010 2012 2014 2016 2018 Q2
2020
-14
-10
-6
-2
2
2006 2008 2010 2012 2014 2016 2018 Q2
2020
-14
-10
-6
-2
2
2006 2008 2010 2012 2014 2016 2018 2T
2020
-14
-10
-6
-2
2
2006 2008 2010 2012 2014 2016 2018 Q2
2020

26. -7.4
6.1
2020 2021
European Commission: a sharp reduction in forecasts
Source: Círculo de Empresarios based on European Commission, 2020. 26
For 2020, the European Commission has revised its Eurozone and EU-27 growth expectations
downwards to 8.9 pp and 8.6 pp, respectively.
Economic hibernation has led to a deeper
recession than that of the 2007 crisis, although
in 2021 growth rates above 6% yearly are
forecasted.
GDP shrinkage in previous crises
YoY change (%)
-11.1
-20
-15
-10
-5
0
DE FR IT ES NL
Great Depression
(1929-32)
-4.6
DE FR IT ES NL
Financial Crisis
(2007-09)
-7.7
DE FR IT ES NL
Covid-19 Crisis
(2020)
Forecasts, European Commission
YoY change (%)
-7.7
6.3
-10
-5
0
5
10
2020 2021
Eurozone EU-27
Spring forecast 2020 Winter forecast 20201
¹European Economic Forecast. Winter 2020 (February 13, 2020).

27. 0
5
10
15
20
25
Greece
Spain
Italy
Croatia
France
Portugal
Sweden
Eurozone
EU-27
Poland
Ireland
Belgium
Hungary
UK
Romania
Denmark
Malta
Netherlands
Austria
Germany
2019 Forecast 2020
European Commission: increases in unemployment
Source: Círculo de Empresarios based on European Commission, 2020. 27
In 2020, the organization forecasts an increase in the unemployment rate of more than 2 pp in the
EU, with the situation being especially intense in Spain, Estonia and Poland.
Covid-19 impact on unemployment rate
Increase in unemployment rate 2019-20 (pp)
Unemployment rate
% active population
+5 pp
+0.5 pp
In 2020, Greece and Spain will continue to register the highest rates (19.9% and 18.9%, respectively).

28. 28
Economic and fiscal measures, EU-27
Source: Círculo de Empresarios based on Oxford Economics and CaixaBank Research, 2020.
France
EU countries have put economic stimulus plans in action to contain the recession caused by
Covid-19.
Germany
• Extension of the subsidies for
reduced working hours.
• €50 billion of direct grants to
small businesses.
• €100 billion for business
recapitalization.
• €3.5 billion for the health
service.
• €500 billion deferral of
business taxes.
~ 19.3% of GDP_ ~ 11.8% of GDP
• Cancellation of business taxes
(based on a case-by-case basis).
• Extension of the conditions for
temporary unemployment.
• Solidarity fund for small
businesses.
• €8 billion for the health service.
• Deferral of taxes and bills for
gas, electricity and rent for
companies.
Italy
~ 14.7% of GDP_~ 5.4% of GDP
• €10.2 billion for families and
businesses.
• Fiscal credit lines for small
businesses.
• Support for the transport
sector.
• €3.5 billion for the health
service.
• Up to €220 billion in loans to
SMEs. And €10,700 billion tax
deferral.
Economic and fiscal measures carried out by governments:
_
EU-27
_
EU recovery fund
• €750 billion (approx. 500
billion in the form of transfers)
the rest in the form of loans.
• Plan financed by long-term
debt transfers from the EU,
supported by the increase in
the ceiling of European budget
spending (from 1.2% to 2% of
EU GDP).

29. -12
-10
-8
-6
-4
-2
0
2
4
2006 2008 2010 2012 2014 2016 2018 2020
France Spain Italy Germany
29
Fiscal and sustainability debt measures
Source: Círculo de Empresarios based on Eurostat and Oxford Economics, 2020.
Public debt evolution
% of GDP
The implementation of the variety of packages and measures by EU countries will lead to a
significant increase in public debt…
Public deficit evolution
% of GDP
… deteriorating the sustainability of future public debt.
2021
30
50
70
90
110
130
150
170
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Italy France
Germany Spain

30. 0
50
100
150
200
250
300
350
400
0
200
400
600
800
1.000
1.200
1.400
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Feb-18
Apr-18
Jun-18
Aug-18
Oct-18
Dec-18
Feb-19
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20
Apr-20
Millares
EU-27 Germany (right axis)
Germany: significant drop in industrial production
Source: Círculo de Empresarios based on Destatis and ACEA, 2020.
30
In March, German industrial production collapsed 14.3% year-on-year (compared to 11.3% in the
Eurozone) as a result of the supply chain breakdown due to the economic standstill.
Industrial production evolution
YoY change (%)
Registration of new vehicles
Thousands of cars
New car registrations in April fell by 61.1% year-on-year (compared to -76.3 % for the EU).
-61.1 %
(-76.3 %)
-30
-25
-20
-15
-10
-5
0
5
10
15
20
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Mar-19
Mar-20
Germany EU-27

31. France: its biggest GDP contraction since 1949
Source: Círculo de Empresarios based on Insee and Oxford Economics, 2020. 31
Demand side GDP evolution
YoY change (%)
Evolution of GDP in Q12020, supply side
QoQ change(%)
On the supply side, the contraction of the construction sector followed by those of services and industry stand out.
In Q1 2020, French GDP contracted by 5.8% quarterly. The drop in goods and services exports
stands out, due principally to the collapse of tourism.
-20
-15
-10
-5
0
5
10
15
Q12008
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
Q12020
Consumption
Investment
Exports of goods and services
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
GDP
Construction
Industry
Agriculture
Services
Leisure
Retailandhospitality
ICT
Professionalservices
Publicservices
Financialservices
Realestate

32. 0
1000
2000
3000
4000
5000
6000
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
Q12020
Q12021
The ECB launches a new stimulus package
32Source: Círculo de Empresarios based on ECB and Oxford Economics, 2020.
The ECB announced that it would increase asset purchases by €120 billion until the end of the year,
and it would offer increased flexibility on capital and liquidity requirements for financial institutions.
ECB balance sheet
Billions of €
ECB vs Fed balance sheet weekly increase
Billions of € and $
Q42021
Reaction by the ECB with regard to monetary
stimulus plans has been slower compared to the
Fed. This is due to certain legal and political
limitations. It will be necessary to wait and see
what the possible impact of the Federal
Constitutional Court of Germany sentence
decision will have on this.
0
100
200
300
400
500
600
700
06/03
13/03
20/03
27/03
03/04
10/04
17/04
24/04
01/05
ECB
Fed

33. 33
United Kingdom: foreign trade decrease
On 19th May, the United Kingdom Global Tariff (UKGT) was
passed. It will substitute the EU Common Customs Tariff from
1st January 2021. This tariff will allow for simpler and cheaper
imports to the United Kingdom that can be paid for in
pounds.
Foreign goods trade
YoY change (%)
Trade barriers
United Kingdom announced a new tariff arrangement that will substitute the EU common external tariff,
against a backdrop in which goods exports are expected to contract by 22% in Q2 2020.
Source: Círculo de Empresarios based on Oxford Economics and Departament for International Trade UK, 2020.
(Current)(From Jan-2021)
-25
-20
-15
-10
-5
0
5
10
15
20
Q12008
Q42008
Q32009
Q22010
Q12011
Q42011
Q32012
Q22013
Q12014
Q42014
Q32015
Q22016
Q12017
Q42017
Q32018
Q22019
Q12020
Q42020
Q32021
Exports of goods
Imports of goods
UK Global Tariff Common External Tariff
Average tariff (%) 5.7% 7.2%
Agriculture 16.1% 18.3%
Fish 11.0% 11.7%
Processed agricultural product 10.6% 15.9%
Industrial goods 2.5% 3.7%
Tariff free tariff lines (% of total
products)
47% 27%
Agriculture 23% 16%
Fish 8% 8%
Processed agricultural product 41% 29%
Industrial goods 57% 31%

34. Oil (I): the price of crude oil falls to 2016 levels
Source: Círculo de Empresarios based on EIA, 2020. 34
Since early 2020, the price of West Texas has fallen 45%, reaching around $30. On 22nd April, the
oversupply of crude led to the price of a barrel falling to negative numbers for the first time in its
history.
Upward pressures
2
1 Increase in political tensions between
US and Iran
2
Possible reactivation of the trade war
between US and China
1
Evolution of oil price
$ per barrel
Downward pressures
Factors related to the evolution of oil in the short and
medium term...
Stagnation of the economy, global
recession and the collapse of trade
Future result of the elections in US
-50
-25
0
25
50
75
2-Jan
13-Jan
24-Jan
4-Feb
15-Feb
26-Feb
9-Mar
20-Mar
31-Mar
11-Apr
22-Apr
3-May
14-May
25-May
2019
2020
2019
2020
Brent barrel
West Texas barrel
3
Saudi Arabian production increase to
record levels

35. Oil (II): supply side adjustment
Source: Círculo de Empresarios based on EIA, 2020. 35
In 2020, according to the EIA global consumption registered an average drop of 8.1 million barrels
daily (falling to 92.6 million barrels).
Production of liquid fuels
Millions of barrels per day
0
20
40
60
80
100
120
2018 2019 2020 2021
Non member countries OECD
OECD Countries
Forecasts EIA
0
20
40
60
80
100
120
2018 2019 2020 2021
Non member countries
OPEP
Member countries OPEP
Forecasts EIA
Consumption of liquid fuels
Millions of barrels per day
68.1
28.9
43.1
33.3

36. Stock markets (I): measured recovery as a result of
economic incentives
36Source: Círculo de Empresarios based on Bloomberg, 2020.
World stock market index (MSCI WORLD)
Points
60
65
70
75
80
85
90
95
100
105
110
Jan-20
Jan-20
Feb-20
Mar-20
Mar-20
Apr-20
May-20
S&P 500
Topix
Stoxx 600
Nasdaq 100
Dow Jones
Main stock market indices
January 2020 = 100
1000
1200
1400
1600
1800
2000
2200
2400
Apr-13
Sep-13
Feb-14
Jul-14
Dec-14
May-15
Oct-15
Mar-16
Aug-16
Jan-17
Jun-17
Nov-17
Apr-18
Sep-18
Feb-19
Jul-19
Dec-19
May-20
-34.1%
Jun-20

37. Stock markets (II): Dow Jones falls to 2016 levels
37Source: Círculo de Empresarios based on Bloomberg, 2020.
Evolution of Dow Jones index
Points
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
May-74
May-76
May-78
May-80
May-82
May-84
May-86
May-88
May-90
May-92
May-94
May-96
May-98
May-00
May-02
May-04
May-06
May-08
May-10
May-12
May-14
May-16
May-18
May-20
Largest Dow Jones fall in one session
(%)
The Covid-19 crisis has caused two of
the biggest one-session falls in its
history.
On 9th March, after registering 7% falls during its opening, Wall Street ceased trading for 15 minutes.
-25 -20 -15 -10 -5 0
4, Jan 1932
26, Oct 1987
12, Aug 1932
12, Mar 2020
6, Nov 1929
5, Oct 1931
29, Oct 1929
16, Mar 2020
28, Oct 1929
19, Oct 1987

38. Stock markets (III): after reaching 2008 levels, the
volatility recedes
38Fuente: Círculo de Empresarios based on Bloomberg, 2020.
Volatility index VIX
0
20
40
60
80
100
May-00
Nov-00
May-01
Nov-01
May-02
Nov-02
May-03
Nov-03
May-04
Nov-04
May-05
Nov-05
May-06
Nov-06
May-07
Nov-07
May-08
Nov-08
May-09
Nov-09
May-10
Nov-10
May-11
Nov-11
May-12
Nov-12
May-13
Nov-13
May-14
Nov-14
May-15
Nov-15
May-16
Nov-16
May-17
Nov-17
May-18
Nov-18
May-19
Nov-19
May-20

39. 39Source: Círculo de Empresarios based on Thomson Reuters, 2020.
Fixed income: risk premiums contained
Interventions by the ECB have contained the advance of risk premiums.
Evolution of risk premium
German bond yield difference (pb)
Risk premium, May-20
German bold yield difference (pb)
106
France
36.4Portugal
94.5
Spain
97.5
Italy
191.9
Belgium
42.0
Netherlands
20.4
Austria
30.2
Greece
182.7
Ireland
49.6
0
50
100
150
200
250
300
350
400
450
May-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Spain Portugal Italy
Greece France Ireland

40. 40

41. 41
Executive summary
The emergence of Covid-19 has obliged governments to adopt extraordinary lockdown and hibernation measures
that have led to a standstill of all economic activity except essential services. According to the main national and
international organizations, in 2020, Spanish GDP will fall between 9.5% and 12.4% yearly. For 2021, a gradual
recuperation is expected, between 4.3% and 8.5%. There is a high degree of uncertainty concerning these
forecasts, and the final figures will be conditioned by the evolution of the pandemic, the duration of the restrictive
measures adopted to control it, and the success of the easing of restrictions to reactivate the economy and return
to a situation of relative normality.
In Spain, the recovery will be slower due to the following:
- The severity of the health sector crisis in our country.
- The importance of the tourism industry for the economy, one of the sectors most affected by the Covid-19 crisis.
- The reduced average size of companies (37% of GDP), with increased vulnerability to the economic impact of
the crisis.
- The duality of the job market with a significant number of temporary contracts (27% of the total).
- Fewer possibilities for teleworking during the lockdown due to the nature of many jobs (68% workers without this
option).
On top of this, the vulnerable fiscal position from which we start must be taken into consideration, and the
decreased capacity for indebtedness as a result of stimulus policies.
Also worrying is the asymmetrical impact on sectors, causing particular damage to services, and a worsening of the
already high levels of unemployment and public debt and deficit.
Source: Círculo de Empresarios, 2020.

42. Risks compounded by Covid-19
42
• Increased unemployment.
• Uncertainty on the future evolution of the economy on a national and international level.
• Very little room for maneuver for European monetary policy and Spanish fiscal policy.
• The decrease of international trade and disruption to the global supply chain.
• The impossibility of carrying out the necessary fiscal consolidation and an upturn of the public sector deficit
and debt.
• The sustainability of the welfare state.
Source: Círculo de Empresarios, 2020.

43. 43
* Forecast
Source: Círculo de Empresarios based on the Bank of Spain, European Commission, IMF and FUNCAS, 2020.
Recession in 2020 and gradual recovery
2%
2021*
4.3%/8.5%
Forecasts by the main national and international organizations (April/May 2020)
YoY change (%)
-9.5%/-12.4%
2020*2019
Uncertain previsions conditioned by the duration and success of the de-escalation plan and the efficiency of
the economic policies to reduce the effects of Covid-19 on economic activity and employment.
2020 2021
Bank of Spain -9.5/-12.4 6.1/8.5
FUNCAS Consensus -9.5 6.1
European Commission -9.4 7
Government -9.2 6.8
IMF -8 4.3

44. Stability programme 2020-21 macroeconomic
framework
44Source: Círculo de Empresarios based on INE and European Commission, 2020.
2020 2021 2020 2021
GDP 2.0 -9.2 6.8 -9.4 7
Private consumption 1.1 -8.8 4.7 -10.7 8.9
Public consumption 2.3 2.5 1.8 5.8 -0.4
GFCF 1.8 -25.5 16.7 -20.7 10.3
Exports 2.6 -27.2 11.6 -19.8 11.9
Imports 1.2 -31 9.3 -21.1 12.4
EMPLOYMENT 2.3 -9.7* 5.7* -8.7 6.1
UNEMPLOYMENT RATE 14.1 19 17.2 18.9 17
PUBLIC DEFICIT -2.8 -10.34 - -10.1 -6.7
PUBLIC DEBT 95.5 115.5 - 115.6 113.7
* Employment: thounsands of hours worked.
Macroeconomic forecasts
SPAIN 2019
Government Stability Programme Spring Forecast'20

45. GDP plummets in the first quarter
Source: Círculo de Empresarios based on INE and Oxford Economics, 2020. 45
GDP and the contribution by national and foreign demand
YoY change (%) and pp
In Q1 2020, GDP fell 4.1 year-on-year (+1.9% Q4 2019) and 5.2% quarter-on-quarter
(5.6 points lower than Q4 2019).
Private consumption fell 6.7% year-on-
year and investment 5.5%, while
public spending increased 3.6%.
In the foreign sector, exports of goods
and services fell 6.3% year-on-year (vs
+3.3% Q4 2019) and imports 7.4% (vs
+2.1% Q4 2019).
It is the biggest year-on-year fall since
Q2 2009 (-4.4%).
The year-on-year fall in Q2 2020 could
reach 17.8%, according to Oxford
Economics.
2,5
3,2
2,8 3,0 2,8
2,3 2,2 2,1 2,2 2 1,9 1,8
-4,1
2,1
2,5
2,8 2,7
2,4 2,2
1,7
1,2 1,4 1,2 1,2 1,7
-1,6
-6
-5
-4
-3
-2
-1
1
2
3
4
5
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Domestic demand Spain External demand Spain
GDP Spain GDP Eurozone

46. PMIs and consumer confidence in free fall
46Source: Círculo de Empresarios based on Markit y CIS, 2020.
Spanish PMIs, April
50=threshold (values > 50 indicates expansion)
In April, manufacturing PMI fell to its lowest level since December 2008, 30.8 points. One of the
worst levels among Eurozone countries, whose average is 33.4 points.
The service sector PMI reached a historic minimum of 7.1 points (12 points for the Eurozone).
Consumer confidence fell 36 points in 2 months, from 85.7 points in February to 49.9 in April, although they are higher
than levels during the Financial Crisis.
Spanish consumer confidence index, April
100=threshold (values > 100 positive consumer outlook)
30.8
7.1
5
15
25
35
45
55
65
Dec-12
Apr-13
Aug-13
Dec-13
Apr-14
Aug-14
Dec-14
Apr-15
Aug-15
Dec-15
Apr-16
Aug-16
Dec-16
Apr-17
Aug-17
Dec-17
Apr-18
Aug-18
Dec-18
Apr-19
Aug-19
Dec-19
Apr-20
Manufacturing PMI
Services PMI
46.3
37.6
85.7
49.9
30
40
50
60
70
80
90
100
110
Apr-08
Oct-08
Apr-09
Oct-09
Apr-10
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
Oct-19
Apr-20

47. Asymmetrical impact of Covid-19 by sector
47Source: Círculo de Empresarios based on INE and Eurostat, 2020.
With regard to services, retail trade
fell 3.5% year-on-year in Q1 (+2.3% in
Q4 2019), its worst result since Q2
2013. Between January and April it
fell by 10.6% year-on-year.
In April, the decrease was 31.6%
year-on-year, 17.5 points higher than
the decrease registered in March.
In the Eurozone, it fell by 11.2% in
March.
On the supply side, the sectors most affected by decreased activity in Q1 were construction (-8.6% year-on-
year) and services (-4.1%). Agriculture fell 2.5% and industry by 2.2%.
Retail trade index evolution
YoY change (%)
-3.5
-14.1
-20
-15
-10
-5
0
5
10
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
Sep-11
Mar-12
Sep-12
Mar-13
Sep-13
Mar-14
Sep-14
Mar-15
Sep-15
Mar-16
Sep-16
Mar-17
Sep-17
Mar-18
Sep-18
Mar-19
Sep-19
Mar-20
Average change in the year YoY change

48. Industrial production collapses in Q1
48Sources: Círculo de Empresarios based on INE, 2020.
Although construction and the service industry have been the sectors most affected by Covid-19,
industrial production has collapsed in Q1 2020 due to disruption to the global supply chain, and
the reduction in national demand and international markets.
Industrial production fell 12.2% year-
on-year in March, its worst figure
since September 2009. In the
Eurozone, the fall was 11.3%.
By sectors, the ones that fell the most
were consumer durables (-27.1%)
and capital goods (-26.3%).
The balance sheet for Q1 2020 is the
worst since 2012 (-5.4% vs. 0.4% in Q4
2019).
Monthly industrial production index
YoY change (%)
-13.0
-12.2
-25
-20
-15
-10
-5
0
5
10
Jul-08
Dec-08
May-09
Oct-09
Mar-10
Aug-10
Jan-11
Jun-11
Nov-11
Apr-12
Sep-12
Feb-13
Jul-13
Dec-13
May-14
Oct-14
Mar-15
Aug-15
Jan-16
Jun-16
Nov-16
Apr-17
Sep-17
Feb-18
Jul-18
Dec-18
May-19
Oct-19
Mar-20

49. -6.5
-7.8 -7.7
-11.1
-6 -5.3
25.3
1.6
3.6 2.6
3.9 3.1 2.8
-4.6
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
14
16
18
20
22
24
26
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
18000000
20000000
2014 2015 2016 2017 2018 2019 2020
Unemployment (left axis) Afilliates (left axis)
Unemployment change (right axis) Affiliation change (right axis)
Persons %
49
1 In April, registered unemployment rose 8% with respect to March (+282,891 people) and the average number of affiliates fell 2.9% (-548,093 people).
Source: Círculo de Empresarios based on the Ministry of Work, Migration and Social Security, 2020.
Evolution of Social Security affiliates and registered
unemployment, May
People and YoY change % in May
Severe impact of the pandemic on employment
The average number of Social Security affiliates
increased 0.5% compared to April (97,462 people),
to 18,556,129. With respect to the same month in
2019, the fall was 4.6%.
There are 3.7 million furloughed employees (91%
forcibly).
In May, registered unemployment rose 0.7% with respect to April (+26,573 people)1, to 3,857,776. In year-
on-year terms, the increase was 25.3%.
According to Fedea, if furloughed workers and
involuntary terminations linked to the Covid-19
situation are included along with the registered
unemployed, the number of people from the active
workforce not in employment totals 8.4 million,
placing what is known as the “effective rate of
unemployment” at 36.4% of the working population.

50. 50Source: Círculo de Empresarios based on the Ministry of Work, Migration and Social Security, 2020.
Distribution of the increase in registered unemployment by sectors
% of the total
More than three quarters of the increase in
unemployment comes from the service sector
Also, almost half of the furloughed workers (47%) are from the restaurant, hotel or retail sectors.
79.9
84
0
10
20
30
40
50
60
70
80
90
Agriculture Industry Construction Services
% of annual increase
% of monthly increase April+May

51. 51
* Forecasts Stability Program 2020-2021.
Source: Círculo de Empresarios based on the Treasury Department, Eurostat, the European Commission, FUNCAS and INE (EPA), 2020.
Unemployment rate in Spain, March 2020
% of the active population
Unemployment rate returns to last year’s levels
Employment and unemployment
YoY change (%) and % of the active population
As part of the Stability Program 2020-21, the government estimates an unemployment rate of 19% in 2020
and 17.2% in 2021. Forecasts by the European Commission are in line with this (18.9% and 17%
respectively), while the FUNCAS Consensus raises this to 20.2% and 17.9% in 2021.
In March the unemployment rate in Spain (14.4% – not including furloughed workers) is almost double the
average for the Eurozone (7.4%).
16.4
14.4
8.4 8.4
7.4 7.2
6.6 6.4
3.8 3.5
2.9
0
2
4
6
8
10
12
14
16
18
Greece
Spain
France
Italy
Eurozone
Sweden
EU
Portugal
UK
Germany
Netherlands
Dec-19
Mar-20
18.8
17.2 16.4 16.6 16.7
15.3 14.6 14.5 14.7 14.0 13.9 13.8 14.4
19.0
1.1
-1.2
0
5
10
15
20
25
30
-16
-12
-8
-4
0
4
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
2020*
Unemployment rate (right axis) Employment annual change
Unemployment annual change

52. 52
Severe deterioration of public accounts
* Forecasts Stability Program 2020-2021.
Source: Círculo de Empresarios based on the Bank of Spain and Treasury Department, 2020
The possibility for consolidation in 2020 is virtually impossible. According to the government, public deficit
will increase from 2.8% of GDP in 2019 to 10.3%1. Public debt could reach 115.5% this financial year.
Debt and government balance, 2007-2020*
% of GDP
Fiscal balance (+/-) in 2019
% of GDP
In March, public debt increased by 3% to €1.22 billion, reaching 98% of GDP, which was initially expected in
2020.
1 According to Fedea, the deficit could reach 12% of GDP in 2020, around €130 billion.
-10.3
-12
-10
-8
-6
-4
-2
0
2
4
0
20
40
60
80
100
120
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020*
Public debt (left axis)
Government balance (right axis)
0.8
-9.4
-1.3-0.1
-2
-0.5
0.1
-0.6
0.3
1.3
0.7
-1.3
2.1
-11.3
-2.8
-14
-12
-10
-8
-6
-4
-2
0
2
4
2006 2009 2019
Central Government Autonomous Regions
Local Communities Social Security

53. A reduction in the pension payroll
Source: Círculo de Empresarios based on the Ministry of Work, Migration and Social Security 2020.
On 1 May, the contributory pensions payroll accounted for €9,852.78 million, 0.27% less compared to the
previous month, its first drop since reporting began. In year-on-year terms, it increased by 2.52%.
Contributory pensions in force
Nº The number of active contributory pensions
on 1st May had fallen 0.4% monthly, to
9,754,137. Covid-19 has had a part to play in
this, including the mortality rate, the
lockdown situation and the closing of
offices:
• In April, those registering to receive a
pension fell 13.9% monthly (-32.2% year-
on-year).
• In terms of the accumulated rate, since
January those signing up fell 22.1% year-
on-year and cancellations increased by
17.5%.
53
-0.4
0.5
-0,6
-0,4
-0,2
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
9640000
9660000
9680000
9700000
9720000
9740000
9760000
9780000
9800000
9820000
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Pensions (number) % monthly change % annual change

54. With regard to households, the
granting of consumer credit has
fallen the most (38.1%). Credit for
the acquisition of a home fell
25.2% year-on-year.
Funding for non-financial
companies reached €36,570
million, with 56,5% being for
credits above €1 million after an
increase of 57.3% year-on-year.
Business funding increases
Source: Círculo de Empresarios based on the Bank of Spain, 2020.
In March, new credit for households fell 24.4% year-on-year as demand dropped in light of the lockdown. On the
other hand, credit for non-financial companies increased 34.6% year-on-year.
New credit for non-financial private sector
Millions of €
54
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Consumer credit Credit to households Credit to non-finantial corporations (right axis)

55. 55
Source: Círculo de Empresarios INE and Eurostat, 2020.
CPI deepens the downward trend
Evolution of prices
YoY change (%)
Changes in family consumer patterns
during the lockdown have also
influenced this trend. Prices for
“Covid-19 goods1” increased 3.1%
while those for “Covid-19 services2”
decreased 4.4% year-on-year.1
In April, CPI fell by 0.7% year-on-year compared to the 1.5% increase in the same month from last year, mainly
due to the fall in prices for fuels and combustibles. In May, the advance CPI figures a 1% year-on-year
decrease.
1 Food, drinks, tobacco, cleaning and non-durable household products, as well as pharmaceutical goods, animal food and personal care products.
2 Property and garage renting, water distribution, sewerage and rubbish collection services, as well as home service charges, electricity, gas, natural gas
for heating, phone, music and streaming TV services, and insurance, and bank and funeral service charges.
-0.7
-1.0
1.1
0.3
-2
-1
0
1
2
3
4
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
Mar-18
May-18
Jul-18
Sep-18
Nov-18
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
Jan-20
Mar-20
May-20
CPI Spain Core CPI Spain* CPI Eurozone
*Excluding unprocessedfood and energy

56. 56
Trade balance, January-March 2020
Variation compared to the same period last year
Source: Círculo de Empresarios based on the Ministry of Industry, Commerce and Tourism, 2020.
Decline in international goods trade
Imports
Capital Goods
Chemical products
Energy products
Exports ▼ 3% 68,903.9 M€
Imports ▼ 4.9% 76,564.8 M€
DEFICIT ▼ 19% -7,660.9 M€
Energy deficit▼ 14.2%
Sector breakdown, January-March 2020
% of the total
Exports
Food, beverage and
tobacco
Capital Goods
Chemical products
19.4
19
15.4
21.1
17.1
13.1
Goods trade evolution, January-March
YoY change (%)
The fall of international trade and disruption in global value and supply chains has had a negative impact on
goods imports and exports.
Geographic distribution, January-March 2020
% of the total
-100
-50
0
50
100
150
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Deficit Exports Imports Exports Imports
Europe 72.4 60.6
EU 59.6 51
Germany 11.2 12.4
France 15 10.7
Italy 7.9 6.1
UK 6.9 3.4
America 10.4 11
Asia 8.9 19.9
China 2.4 8.6
Africa 6.3 8.4
Other 2 0.4

57. 2nd 1st
3rd
Fall in foreign direct investment in 2019
57Source: Círculo de Empresarios based on Datainvex and UNCTAD, 2020.
In 2019, foreign direct investment (FDI) productive gross inflows in Spain fell 54.8% year-on-year to €22,376.6
million (1.8% of GDP generated in the same period). Forecasts for 2020 are far from optimistic, in a context in
which UNCTAD expects a fall in world investment inflows of 30%-40% in 2020-2021 and the implementation of
measures restricting the freedom of direct investment as a result of the crisis.
Spanish external FDI fell 53.8% year-on-year reaching €15,126 million(1.2% of GDP), going primarily to the EU
(39.2% of Spanish FDI total).
60.8% of total FDI received by
Spain in 2019 came from the
EU28, mostly the United
Kingdom (21.9%) and France
(16.6%).
Origin
Destination
Madrid
61.2% of the totalCatalunya
14.4% of the total
FDI infows received in Spain
Millions of €
Castilla and Leon
8.2% of the total
30215
12614
28804
14903
27050
49549
22377
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
54.8%
annual
change

58. 58
The collapse of tourism in March and April
Source: Círculo de Empresarios based on INE, 2020.
Coinciding with the start of the state of alarm and movement restrictions, the entry of tourists to the country
dropped 64.3% year-on-year in March to just 2 million. Total expenditure by tourists also fell 63.3%, from €6 million
in March 2019 to 2.2 million in March 2020.
Arrival of tourists in March
Million of tourists and YoY change (%)
Total expenditure by tourists
Millions of €
In April, the entry of tourists and total expenditure by tourists both amounted 0.
6034.9
2214.9
0
1000
2000
3000
4000
5000
6000
7000
Mar-19 Mar-20
63.3%
15.5
6.2
9.8
4.8
-64.3
-80
-60
-40
-20
0
20
0
1
2
3
4
5
6
Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
Tourists YoY change (right axis )

59. New company registration standstill
59
Source: Círculo de Empresarios based on The Association of Land and Mercantile Registrars of Spain, 2020.
The establishment of companies by Autonomous Community
Nº of companies and YoY change (%)
In April, new company registrations fell 72.1% year-on-year, to 2,454 compared to 8,782 in April 2019.
Decreases in Ceuta and
Melilla (-88.9%), followed by
Catalunya (-88.4%), the
Canary Islands (-86.9%) and
Castilla La Mancha (-82.7%)
stand out.
In comparison, communities
that registered less
pronounced decreases
were Navarre (-29%), Murcia
(-32.5%) and the Balearic
Islands (-36.9%).
-75.6
-88.4
-64.8
-62.5
-74.5
-86.9
-67.5
-36.9
-82.7
-68.1
-32.5
-74.7
-61.0
-74.2
-29.0
-50.8
-59.0
-100
-90
-80
-70
-60
-50
-40
-30
-20
-10
0
0
300
600
900
1200
1500
1800
2100
Madrid
Catalonia
Andalusia
Valencia
Galicia
CanaryI.
CastileandLeon
BalearicI.
Castile-LaMancha
BasqueCountry
Murcia
Aragon
Asturias
Extremadura
Navarre
Cantabria
LaRioja
Apr-19 Apr-20 YoY change % (right axis)

60. abr.-10
nov.-10
jun.-11
ene.-12
ago.-12
mar.-13
oct.-13
may.-14
dic.-14
jul.-15
feb.-16
sep.-16
abr.-17
nov.-17
jun.-18
ene.-19
ago.-19
mar.-20
Moody´s S&P FitchAaa AAA
AA+
AA
AA-
Aa1
Aa2
Aa3
A+
A
A-
A1
A2
A3
BBB+
BBB
BBB-
Baa1
Baa2
Baa3
Rating
50
100
150
200
250
300
350
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20Spain Italy Portugal
Pressure on the risk premium
60Source: Círculo de Empresarios based on Reuters and Bloomberg, 2020
The risk premium has risen in light of the deterioration of the economy. At present, it is below 100 basic points,
after rising above 150 bp in the last week of April.
ECB policy regarding buying up public debt has helped avoid bigger increases.
Risk premium for Spain, Portugal and Italy compared to
the 10-year German bond
pb
Evolution of Spain’s rating
2010 – Mar 2020
+50%

61. 61Source: Círculo de Empresarios based on Reuters, 2020
Uncertainty and instability in the financial markets
Stock market evolution
January 2018=100
Covid-19 has led to historic falls in stock indexes on a global scale. Ibex has fallen more than 30% in the two first
weeks of March. Since then it has recovered 25% of its value.
50
60
70
80
90
100
110
120
130
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
S&P 500 Eurostoxx 500 Ibex 35

62. www.circulodeempresarios.org
The Quarterly Report is a publication by the 'Círculo de Empresarios produced by its Department of Economics, which contains information and opinions from
reliable sources. The 'Circulo de Empresarios' does not guarantee its accuracy or take any responsibility for any errors or omissions contained therein. This
document is intended for informational purposes only. Therefore, under no circumstances shall the 'Círculo de Empresarios’ be responsible for any uses made of
the publication. The opinions and forecasts of the Department may be subject to change without prior notice.