Economic situation summary The uncertainty surrounding the spread of Covid 19 is significantly conditioning economic agents’ expectations for the coming years In this context, most international organizations (the IMF, OECD, World Bank and European Commission) project a contraction of GDP above 3 yearly for 2020 and warn of risks such as rising unemployment and a possible spike in inflation above 2 in some economies, and a future increase of debt as a result of the fiscal and monetary stimulus packages That said, these organizations also point out that without these expansionary measures, the economic recession would have been a lot worse. In developed countries the gradual reactivation of the economy began in May with the easing of movement restrictions to contain the spread of the virus In the US the Fed improved its growth forecasts, envisioning a smaller decrease in GDP 3 4 yearly vs 6 5 previously), and revised its monetary policy goals with a more direct monitoring on the job creation objective In the Eurozone economic sentiment improved as the ECB continued its monetary stimulus plan, and the European Commission finalized details of a European recovery fund of 750 000 million. In most emerging markets the spread of the virus continues to lower the expectations of economic agents, in some cases intensifying the structural risks to these economies (debt sustainability, unemployment In India and Brazil two of the countries most affected by the pandemic, GDP is forecast to contract in 2020 by 10 2 and 6 5 yearly and respectively In China the curve representing new cases seems to be under control, and economic activity has rebounded strongly in the second half of 2020 creating a V shaped recovery.

1. Global and Spanish
economic perspectives
Q3- 2020
October 2020
QUARTERLY REPORT

2. GLOBAL

3. The uncertainty surrounding the spread of Covid-19 is significantly conditioning economic agents’
expectations for the coming years. In this context, most international organizations (the IMF, OECD, World Bank
and European Commission) project a contraction of GDP above 3% yearly for 2020, and warn of risks such as
rising unemployment and a possible spike in inflation above 2% in some economies, and a future increase of
debt as a result of the fiscal and monetary stimulus packages. That said, these organizations also point out that
without these expansionary measures, the economic recession would have been a lot worse.
In developed countries, the gradual reactivation of the economy began in May, with the easing of movement
restrictions to contain the spread of the virus. In the US, the Fed improved its growth forecasts, envisioning a
smaller decrease in GDP (-3.4% yearly vs. -6.5% previously), and revised its monetary policy goals with a more
direct monitoring on the job creation objective. In the Eurozone, economic sentiment improved as the ECB
continued its monetary stimulus plan, and the European Commission finalized details of a European recovery
fund of €750,000 million.
In most emerging markets, the spread of the virus continues to lower the expectations of economic agents, in
some cases intensifying the structural risks to these economies (debt sustainability, unemployment…). In India
and Brazil, two of the countries most affected by the pandemic, GDP is forecast to contract in 2020 by 10.2%
and 6.5% yearly and respectively. In China, the curve representing new cases seems to be under control, and
economic activity has rebounded strongly in the second half of 2020, creating a V-shaped recovery.
Economic situation summary
3
Source: Círculo de Empresarios, 2020.

4. Covid-19 continues its spread on a global scale
Source: Círculo de Empresarios based on ONS, 2020.
4
Evolution of coronavirus cases
Millions of people
Global coronavirus incidence
From September 28th
Coronavirus is spreading rapidly on a global scale. In
some areas, certain mobility and activity restrictions are
lifted, while they are reimposed in others.
In October, there were more than 35 million cases of
Coronavirus in the world (0.4% of the world population).
In accumulated terms, US is the country with the most
cases, followed by India.
0
1
2
3
4
5
6
7
31-Dec 31-Jan 29-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul 31-Aug
South America US
China Europe
India Rest
US India Brazil Russia Spain Mexico France
21,495
618.5
cases/million
109.5
new
cases/million
deaths/million
4,402
59.5
69.2
22,263
67.4
666.8
7,890 15,324 5,664 8,251
47 233.5 185.6
668
36.2
592.8 486.1139.3

5. Global economic recession
Source: Círculo de Empresarios based on OECD, 2020.
5
OECD growth forecasts, September 2020
YoY change (%)
A slight improvement for the world economic recovery scenario in the second half of 2020.
World growth perspectives
YoY change (%) and contributions to growth
Nov 2019 scenario
Jun 2020
scenario
Sep 2020 scenario
Single impact of Covid-19
Double impact of Covid-19
-11.5
-2.9
-7.3
-10.2
-6.5
-10.2
1.8
-1
-4.1
-10.1
-5.8
-3.8
-10.5
-9.5
-5.4
-7.9
-4.5
2020
1.4
3.9
5
3
3.6
8
3.1
2.5
7.6
1.5
4
5.4
5.8
4.6
5.1
5
2021
10.7
0.1
0.9
1.4
-0.3
1.1
4.2
6.1
2
1.8
1.5
0.7
2.2
0.3
1.5
0.6
1.3
2.6
South Africa
Turkey
Russia
Mexico
Brazil
India
China
South Korea
Australia
UK
Japan
US
Italy
France
Germany
Eurozone
World
2019
86
91
96
101
106
Q1
2019
Q2
2019
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021

6. World demand is showing signs of recovery
Source: Círculo de Empresarios based on OECD and CPB the Netherlands Bureau for Economic Policy Analysis, 2020.
6
Household consumption is reactivated as movement restrictions to stop the spread of the virus
are lifted.
Evolution of world trade
(%)
Household consumption
Change with respect to January 2020 (%)
In Q3, according to the World Trade Monitor, the volume of world trade returned to positive registers after
decreasing by more than 17% year-on-year in May.
-35
-30
-25
-20
-15
-10
-5
0
5
10
China
SouthKorea
Germany
Japan
Brazil
US
UK
Mexico
Turkey
Canada
France
Italy
April June July
-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

7. Industrial and service sectors
Source: Círculo de Empresarios based on Oxford Economics, 2020.
7
Industrial production on a global scale started to pick up at the end of Q2 2020, although it is
expected to remain below 2019 levels until 2021.
Industrial and service sectors evolution in previous
recessions
Change with respect to the period prior to the recession (%)
Industrial production evolution
Q4 2019 index = 100
The Covid-19 crisis has led to a decline in the
industrial and service sectors above those of other
crises, although it is expected that this one will not
last as long.
60
70
80
90
100
110
120
Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
US China India Japan Germany
-10
-8
-6
-4
-2
0
2
Covid-19 crisis (Q42019-
Q22020)
Financial crisis (2008/09) Dot-Com crisis (US
2000/01)
Industrial production
Services sector
GDP

8. Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20
Germany 41.7 42.1 44.1 43.7 45.3 48 45.4 34.5 36.6 45.2 51 52.2 56.4
France 50.1 50.7 51.7 50.4 51.1 49.8 43.2 31.5 40.6 52.3 52.4 49.8 51.2
Italy 47.8 47.7 47.6 46.2 48.9 48.7 40.3 31.1 45.4 47.5 51.9 53.1 53.2
US 51.1 51.3 52.6 52.4 51.9 50.7 48.5 36.1 39.8 49.8 50.9 53.1 53.2
Spain 47.7 46.8 47.5 47.4 48.5 50.4 45.7 30.8 38.3 49 53.5 49.9 50.8
UK 48.3 49.6 48.9 47.5 50 51.7 47.8 32.6 40.7 50.1 53.3 55.2 54.1
Japan 48.9 48.4 48.9 48.4 48.8 47.8 44.8 41.9 38.4 40.1 45.2 47.2 47.7
China 49.8 49.3 50.2 50.2 50 35.7 52 50.8 50.6 50.9 51.1 51 51.5
India 51.4 50.6 51.2 52.7 55.3 54.5 51.8 27.4 30.8 47.2 46 52 56.8
Brazil 53.4 52.2 52.9 50.2 51 52.3 48.4 36 38.3 51.6 58.2 64.7 64.9
World 49.7 49.8 50.3 50.1 52.2 47.1 47.3 39.6 42.4 47.9 50.6 51.8 50.6
Manufacturing PMIs in an expansionary phase
Source: Círculo de Empresarios based on Markit, 2020.
8
In Q3, manufacturing sentiment showed slight signs of improvement after the slump in the
previous quarter as new orders start to pick up.
Manufacturing PMI
50=threshold (values>50 indicate expansion)
Note: in order to calculate the global data, the JP Morgan Global Manufacturing PMI has been used.
67%ofworldGDP

9. Expansion of the monetary policy
Source: Círculo de Empresarios based on Bloomberg, 2020.
9
In the current context of uncertainty around containment of the pandemic and global economic
recovery, central banks are expected to adopt an ultra expansionary monetary policy that will remain in
place for the next few years.
Monetary policy measures by the main central banks
Forward guidance: breaking news reports on medium-term monetary policy decisions.
Asset backed
securities
Yield Control
"Forward
guidance"
Negative
Rate
Govt Bonds Corp Bonds
US
Near Zero
Rates
Canada
China
Eurozone
India
Japan
Mexico
Norway
Russia
Saudi Arabia
Australia
Brazil
South Korea
Sweden
UK
Financial crisis 2008-10 NowYes No

10. China: V-shaped economic recovery
Source: Círculo de Empresarios based on Oxford Economics, National Bureau Statistics of China, 2020.
10
OECD GDP forecasts, September
YoY change (%)
In Q2 2020, China’s GDP increased 11.5% quarterly compensating for the 10% fall in Q1 2020.
In year-on-year terms, the economy reached a 3.2% growth rate that confirms its V-shaped recovery.
Economic activity
YoY change (%)
V-shaped GDP recovery
Quarterly change (%) and index 100=Q4 2019
6.1
1.8
8
2019 2020
2021
The breakdown of figures reveals an uneven economic
advance. While the supply side is showing positive signs
through industrial production, internal demand remains at a
standstill.
1,3
-10
11,5
70
80
90
100
110
120
130
-12
-8
-4
0
4
8
12
Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
QoQ change
Index 100=Q4 19
-30
-20
-10
0
10
20
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
Jun-20
Aug-20
Industrial production Retail

11. China: solid expectations while investment weakens
Source: Círculo de Empresarios based on Oxford Economics, General Customs Administration of China, Rhodium Group and Bloomberg, 2020.
11
Goods exports
Billions $
Direct foreign investment flows
% of GDP
In August, total exports grew 9.5% year-on-year, to $235.3 billion. The trend has improved as
international demand recovers. In accumulated terms for the year, exports have grown 2.3%, which is
below 2019 levels.
Chinese investment flows in the USA fell 31% in the first six months of 2020 compared to the same period in 2019,
reaching $4,1billion (0.03% of GDP).
100
120
140
160
180
200
220
240
260
15
20
25
30
35
40
45
50
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
Jun-20
Aug-20
Exports to US Exports to Asia
Exports to EU Total exports (right axis)
0
5
10
15
20
25
30
35
40
45
50
2013 2014 2015 2016 2017 2018 2019 Jan-Jun
2020
FDI from China in US
FDI from US in China

12. 57.2
159.1
58.2
0
50
100
150
200
250
300
Q12006
Q12007
Q12008
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
Q12020
Household debt
Business debt
Public debt
China: deficit and debt worsens
Source: Círculo de Empresarios based on Oxford Economics, 2020.
12
… which will put pressure on economic agent debt
which is already at record levels.
Government balance sheet
% of GDP
Economic stimulus packages by the Chinese government could put the public deficit at 3.6% of
GDP in 2020 …
Non-financial sector debt
% of GDP
-5
-4
-3
-2
-1
0
1
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

13. India: no grip on the pandemic and a collapse of GDP
Source: Círculo de Empresarios based on Oxford Economics and the Google Mobility Report, 2020.
13
In Q2 2020, India’s GDP fell 23.9% year-on-year mainly due to the economic standstill in light of the tough restrictive
measures imposed by the state authorities to contain the spread of the virus. This situation and the high state of
uncertainty has been a deterrent to investment (-47% year-on-year) and household consumption (-26% year-on-year).
Population mobility in retail
Change with respect to the base year (%)(average 7 days)
GDP evolution and the main demand components
YoY change (%)
Currently, India is the second country in the world
with the most accumulated cases after the US,
and the one with the highest number of reported
cases per day.
8.2 7.1 6.7 6.1 4.2
-10.2
-30
-20
-10
0
10
20
30
40
50
-100
-80
-60
-40
-20
0
20
40
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Q22020
Q32020
Q42020
GDP growth (right axis)
Exports
Household consumption
Investment
Annual GDP
-100
-80
-60
-40
-20
0
20
4-Mar 4-Apr 4-May 4-Jun 4-Jul 4-Aug 4-Sep
India Hong Kong New Zealand
Brazil Switzerland US

14. Source: Círculo de Empresarios based on Oxford Economics, 2020.
US: historic fall of GDP in Q2
GDP and demand side components
YoY change (%)
14
The Covid-19 crisis has caused the most drastic American economic quarterly fall. GDP registered -9.5%
quarterly in Q2 2020 (-1.3% in Q1). This figure places the economy in a technical recession.
GDP evolution and forecasts
YoY and QoQ change (%)
By components on the demand side, the fall in private consumption of -10.5% stands out, as well as exports with
a decrease above 20% year-on-year.
-9.5
-12
-8
-4
0
4
8
Q1
2014
Q3
2014
Q1
2015
Q3
2015
Q1
2016
Q3
2016
Q1
2017
Q3
2017
Q1
2018
Q3
2018
Q1
2019
Q3
2019
Q1
2020
Q3
2020
QoQ change YoY change
-25
-20
-15
-10
-5
0
5
10
Q1
2014
Q3
2014
Q1
2015
Q3
2015
Q1
2016
Q3
2016
Q1
2017
Q3
2017
Q1
2018
Q3
2018
Q1
2019
Q3
2019
Q1
2020
Q3
2020
Private consumption
Exports
Imports
Investment

15. Source: Círculo de Empresarios based on Oxford Economics, the U.S. Census Bureau and Markit, 2020.
15
US: economic reactivation
PMIs
Points
Activity indicators show a recovery of the American economy as the lockdown measures are
eased, although this is gradual.
Macro indicators
Index 2012 = 100
In July, increased industrial production moderated to 3% month-on-month (vs. 5.7% in June) and retail trade to
1.2% (vs. 8.4% in June).
90
100
110
120
130
Jan-12
Jun-12
Nov-12
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
Retail Industrial production
20
30
40
50
60
70
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Manufacturing PMI
Services PMI
Non manufacturing PMI (ISM)

16. Source: Círculo de Empresarios based on Oxford Economics y U.S. Census Bureau, 2020.
16
US: small business expectations
American small business survey: “How long will it take before business
returns to last year’s level of operations?
%
In August, the weekly survey by the U.S. Census Bureau showed mixed signs in the recovery of small business
activity after the re-opening of the economy.
- Almost 10% of small
businesses do not expect a
return to normality or have
closed permanently.
- Almost 50% do not expect
a return to normality in the
next 6 months.
- Around 25% were only
slightly affected or have
returned to normality.
8.510.6 12.4 12.7 15.6 16.1
15.2
51.8 45.9
36.5
37
30.3
19.8
31.4
35.2
41.2 38.3
43.9 47.6
6.2 6.5 9.6 9.1 9.7 7.5
1.5
0
25
50
75
100
2-May 9-May 16-May 23-May 30-May 6-Jun 13-Jun 20-Jun 27-Jun 15-Aug
Return to normal
< 1 month
2-6 months
>6 months
Never
Closed

17. Source: Círculo de Empresarios from the US Bureau of Labor Statistics, 2020.
17
US: employment levels start to recover
Monthly evolution of employment
% of the workforce and job positions in millions
In August, the return to work was slow with the creation of 1.4 million jobs, reducing the unemployment
rate to 8.4%, the lowest recorded since the start of the crisis.
For its part, claims for unemployment benefits continued increasing above the weekly 800,000 requests.
Unemployment benefit claims
Millions
125
130
135
140
145
150
155
0
2
4
6
8
10
12
14
16
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
Jul-20
Millares
Unemployment rate
Number of employees (right axis)
0
1
2
3
4
5
6
7
8
7-Mar
21-Mar
4-Apr
18-Apr
2-May
16-May
30-May
13-Jun
27-Jun
11-Jul
25-Jul
8-Aug
22-Aug
5-Sep

18. 18
US: the Fed’s strategic revision (I)
Source: Círculo de Empresarios based on Bloomberg and the Fed, 2020.
The structural changes that have motivated the
readjustment in the Fed’s monetary policy strategy are
mainly:
• A decrease in GDP growth potential (a fall in
productivity and an aging population).
• The continual decrease in interest rates (reduced room
for maneuver to lower interest rates in times of
recession).
• Reduced inflationary sensitivity to the dynamism of the
labour market and activity (flattening of the Phillips
Curve).
At the end of August, Jerome Powell announced the Fed’s new objectives in his Jackson Hole
speech, ending its monetary policy strategy carried out since November 2018.
The Fed pursued a long-term inflation objective of 2%,
prioritizing in large measure the creation of employment.
Potential GDP estimate and neutral interest rate*
%
*Neutral interest rate: interest rate with which the job and goods market is balanced.
0
1
2
3
4
5
6
7
Dec-61
Feb-66
Apr-70
Jun-74
Aug-78
Oct-82
Dec-86
Feb-91
Apr-95
Jun-99
Aug-03
Oct-07
Dec-11
Feb-16
Apr-20
Neutral interest rate
Potencial GDP

19. US: the Fed’s strategic revision (II)
Source: Círculo de Empresarios based on the Fed, 2020.
19
In its September meeting, the Fed decided to maintain its monetary policy without change, with
interest rates in a range of between 0% and 0.25%, which is expected to remain until 2023.
The Fed’s balance sheet
Trillions $
The Fed’s growth forecasts, September
FOMC* members, September meeting 2020
Official interest rate (%)
0
1
2
3
2020 2021 2022 2023 Long term
*Federal Open Market Committe
0
1
2
3
4
5
6
7
8
Aug-03
Aug-04
Aug-05
Aug-06
Aug-07
Aug-08
Aug-09
Aug-10
Aug-11
Aug-12
Aug-13
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
Aug-19
Aug-20
Recession
Recession
2020 2021 2022 2023 Long term
GDP growth -3.7 4.0 3.0 2.5 1.9
June forecasts -6.5 5.0 4.6 1.8
Unemployment rate 7.6 5.5 4.6 4.0 4.1
June forecasts 9.3 6.5 5.5 4.1
PCE inflation 1.2 1.7 1.8 2.0 2.0
June forecasts 0.8 1.6 1.7 2.0
PCE underlying inflation 1.5 1.7 1.8 2.0
June forecasts 1.0 1.5 1.7

20. US: the Fed’s strategic revision (III): risks
Source: Círculo de Empresarios based on Bloomberg and BIS, 2020.
20
The setting of interest rates between 0.25% and 0% in the long term, and a greater preference by agents
for safe assets could increase pressure on the sustainability of future debt.
Public debt yields
%
These days, public and business debt is at historic levels.
Evolution of the non-financial debt
% of GDP
0
1
2
3
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
Jul-20
Aug-20
Sep-20
Bond 2 years
Bond 10 years
40
50
60
70
80
90
100
110
120
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
US Government debt Corporate debt
Household debt

21. -50
-40
-30
-20
-10
0
10
20
Q2
2013
Q4
2013
Q2
2014
Q4
2014
Q2
2015
Q4
2015
Q2
2016
Q4
2016
Q2
2017
Q4
2017
Q2
2018
Q4
2018
Q2
2019
Q4
2019
Q2
2020
Unit labour costs
Hours worked
Labour productivity
US: inflation
Source: Círculo de Empresarios based on the U.S. Census Bureau, 2020.
21
Inflation indicators
YoY change (%)
In July, underlying inflation bounced back to 1.6% and labour costs increased above 9% year-on-year for the
second consecutive quarter.
Labor costs and productivity
YoY change (%)
With the Fed’s new inflation target, prices could withstand annual growth rates above 2% yearly in the
short and medium terms.
-1
0
1
2
3
4
5
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
CPI Food Underlying inflation

22. Latin America: economic forecasts
For 2020, growth forecasts for countries in Latin America have worsened due to the increase in
Covid-19 cases, and the impact of the measures adopted to stop its spread.
Development of GDP
Annual change (%)
Source: Círculo de Empresarios based on Oxford Economics, 2020.
22
-0.3
-7.5
5.6
2019 2020 2021
Latin America
1.1
-5.5
5.1
-14
-10
-6
-2
2
6
10
14
2019 2020 2021
Brazil
-0.3
-7.2
4.7
2019 2020 2021
Mexico
3.3
-6.6
4.8
2019 2020 2021
Colombia
2.2
-12.5
13.6
-14
-10
-6
-2
2
6
10
14
2019 2020 2021
Peru
1.0
-5.3
5.7
2019 2020 2021
Chile
-2.1
-10.4
9.1
2019 2020 2021
Argentina
Closed data Forecasts

23. Latin America: the impact of economic measures
Fiscal expenditure in 2020
% of GDP
Source: Círculo de Empresarios based on Oxford Economics, 2020.
Brazil and Peru are the countries in the region that have granted the most aid to mitigate the economic
effects of the health crisis. This has included lowering official interest rates and increasing the public debt.
Official interest rates
%
Public debt
% of GDP
0
2
4
6
8
Mexico Argentina Colombia Chile Peru Brazil
23
0
10
20
30
40
50
60
70
80
90
0
2
4
6
8
10
12
14
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
Jul-20
Brazil Colombia Peru
Chile Mexico Argentina (right axis)
0
20
40
60
80
100
120
2013 2014 2015 2016 2017 2018 2019 2020
Argentina Brazil Chile Colombia Mexico Peru

24. 75000
80000
85000
90000
95000
100000
0
5
10
15
Q1
2018
Q2
2018
Q3
2018
Q4
2018
Q1
2019
Q2
2019
Q3
2019
Q4
2019
Q1
2020
Q2
2020
Working population (right axis) Unemployment rate
Brazil: the country with the most Covid-19
cases in Latin America
In June, Brazil’s economy showed signs of improvement due to the lifting of lockdown measures and
the “corona vouchers”. However, GDP in Q2 2020 fell 11.4% year-on-year (-0.3% Q1 2020), taking
Brazil into a technical recession.
Quarterly development of GDP
YoY change (%)
Workforce and unemployment level
Thousands of people and % of workforce
Source: Círculo de Empresarios based on Banco Central do Brasil and IBGE, 2020.
Manufacturing PMI, services PMI and EAI
Points and MoM change (%)
24
-11.4
-12
-8
-4
0
4
8
12
Q22008
Q42008
Q22009
Q42009
Q22010
Q42010
Q22011
Q42011
Q22012
Q42012
Q22013
Q42013
Q22014
Q42014
Q22015
Q42015
Q22016
Q42016
Q22017
Q42017
Q22018
Q42018
Q22019
Q42019
Q22020
COVID-19
Economic
recession 2014
Financial
crisis 2008
-10
-8
-6
-4
-2
0
2
4
6
20
40
60
80
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
Jul-20
Aug-20
Brazil Manufacturing PMI Brazil Services PMI EAI (right axis)
QoQ
change
-9.6%

25. Mexico: slight economic recovery
Source: Círculo de Empresarios based on Oxford Economics and INEGI, 2020.
Economic activity index (IGAE)
Index 2013=100
25
In July, the global index of economic activity (IGAE) continued to show signs of recovery for the second
consecutive month, boosted mostly by industrial production after the historic fall registered in April.
For its part, it is expected that the uncertainty and the low level of activity will continue into the second half of the
year, placing its rate of unemployment above 4.5% for the whole of 2020.
Unemployment rate
% of the workforce
40
50
60
70
80
90
100
110
120
130
Jan-93
Apr-94
Jul-95
Oct-96
Jan-98
Apr-99
Jul-00
Oct-01
Jan-03
Apr-04
Jul-05
Oct-06
Jan-08
Apr-09
Jul-10
Oct-11
Jan-13
Apr-14
Jul-15
Oct-16
Jan-18
Apr-19
Jul-20
Total index Industry Services sector
3
4
5
6
Nov-05
Jul-06
Mar-07
Nov-07
Jul-08
Mar-09
Nov-09
Jul-10
Mar-11
Nov-11
Jul-12
Mar-13
Nov-13
Jul-14
Mar-15
Nov-15
Jul-16
Mar-17
Nov-17
Jul-18
Mar-19
Nov-19

26. Peru: significant decrease in the forecasts for Q2
In Q2 2020, Peru’s GDP fell 22.8% due to social isolation, uncertainty and the shrinking of global demand.
It is the second Latin American country with the most Covid-19 cases.
Source: Círculo de Empresarios based on INEI and Oxford Economics, 2020.
Evolution of GDP
Quarterly and YoY change(%)
GDP components
YoY change(%)
Evolution of retail trade and the leisure industry
Change of number of visitors 7-day average (%)
26
-12.5
3.6
-30
-25
-20
-15
-10
-5
0
5
10
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Q22020
Q32020
Q42020
QoQ change
Current forecasts
Pre-Covid-19 scenario
Q2 2017 Q2 2018 Q2 2019 Q2 2020
Domestic demand 0.7 5.7 1.9 -27.7
Privateconsumption 2.9 5 2.6 -22.1
Public consumption 0.9 2.6 4.6 -3.2
Investment -5.4 9.4 -1.5 -57
Foreign demand -243.9 -15.5 -83.8 -1,784.5
Exports 15.9 5.9 -1.5 -40.3
Imports 8 6.7 1.1 -31.3
-90
-60
-30
0
17-Feb 17-Mar 17-Apr 17-May 17-Jun 17-Jul 17-Aug
Argentina Brazil Chile Colombia Mexico Peru

27. Eurozone: GDP collapse
27
In Q2 2020, Eurozone GDP registered an unprecedented contraction as a result of the economic
standstill due to the lockdown measures. Spain heads the quarterly fall with a GDP decrease of 17.8%.
Economic growth
Quarterly change (%)
-17.8-20
-16
-12
-8
-4
0
4
2013 2014 2015 2016 2017 2018 2019 2T
2020
Spain
-13.8
-20
-16
-12
-8
-4
0
4
2013 2014 2015 2016 2017 2018 2019 2T
2020
France
-9.7
-20
-16
-12
-8
-4
0
4
2013 2014 2015 2016 2017 2018 2019 2T
2020
Germany
-12.8
-20
-16
-12
-8
-4
0
4
2013 2014 2015 2016 2017 2018 2019 2T
2020
Italy
-11.8
-20
-16
-12
-8
-4
0
4
2013 2014 2015 2016 2017 2018 2019 2T
2020
Eurozone
-8.5
-20
-16
-12
-8
-4
0
4
2013 2014 2015 2016 2017 2018 2019 2T
2020
Netherlands
Q2 Q2 Q2
Q2 Q2 Q2
Source: Círculo de Empresarios based on Eurostat, 2020.

28. Eurozone: the second wave of cases
Source: Círculo de Empresarios based on the WHO and Google Mobility Trends, 2020. 28
After stabilizing the curve representing new cases at the end of May, the appearance of further cases
has obliged authorities to reimpose exceptional measures in order to stop the spread of the virus, which
has conditioned the reactivation of the economy.
Evolution of daily Covid-19 cases
Number of new cases per million inhabitants
Population mobility in retail businesses
% change with respect to the base level (7-day average)
0
50
100
150
200
250
24-Feb 24-Mar 24-Apr 24-May 24-Jun 24-Jul 24-Aug 24-Sep
Spain Germany Italy Netherlands France
-100
-80
-60
-40
-20
0
20
17-Feb
2-Mar
16-Mar
30-Mar
13-Apr
27-Apr
11-May
25-May
8-Jun
22-Jun
6-Jul
20-Jul
3-Aug
17-Aug
Germany
Netherlands
France
Italy
Spain

29. Eurozone: the impact on unemployment and prices
Source: Círculo de Empresarios based on European Commission, 2020.
The decrease in activity has caused a significant increase in unemployment. For its part, inflation in
August fell, registering -0.2%, which places it at the low levels of 2016.
Inflation
Unemployment rate increase 2019-20 (pp)
Unemployment rate
% of the workforce
0
5
10
15
20
25
30
Jan-08
Aug-08
Mar-09
Oct-09
May-10
Dec-10
Jul-11
Feb-12
Sep-12
Apr-13
Nov-13
Jun-14
Jan-15
Aug-15
Mar-16
Oct-16
May-17
Dec-17
Jul-18
Feb-19
Sep-19
Apr-20
Eurozone Germany Spain France Italy Netherlands
-20
-15
-10
-5
0
5
10
15
-1
0
1
2
3
4
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
CPI
Underlying inflation
Energy (right axis)
29

30. Germany: slight industrial recovery
Source: Círculo de Empresarios based on Eurostat, 2020.
30
In the first half of 2020, Germany’s GDP contracted by around 14%, conditioned principally by the fall
in private consumption and exports.
First quarter growth 2020
QoQ change (%)
Industrial production
Change compared to January 2020 (%)and contributions by
activity (pp)
After the lockdown, Germany’s industry began to recover, although it remains far from the levels prior to January.
-30
-25
-20
-15
-10
-5
0
5
GDP Private
consumption
Public
expenditure
Investment Exports Imports
Q1 2020 Q2 2020 1st Semester 2020
-30
-25
-20
-15
-10
-5
0
5
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20
Construction (pp.)
Rest (pp.)
Pharmaceutical sector (pp.)
Automotive sector (pp.)
Industrial production (%)

31. The ECB continues with its monetary stimulus packages
Source: Círculo de Empresarios based on the European Commission, 2020. 31
The ECB has maintained with no changes its reference interest rates for its refinancing operations at 0%,
and the deposit facility rate at -0.5%. It is expected that these rates will remain or decrease until the
perspectives for inflation converge solidly with the target level.
ECB forecasts for the Eurozone,
September 2020
YoY change (%)
European Commission forecasts
YoY change (%)
At the same time, the organization will
maintain its assets purchasing program to
deal with the pandemic (PEPP), whose
total volume is €1.35 trillion.
-1
0
1
2
3
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Deposit facility rate
Deposit interest rate
2020 2021 2022
GDP growth -8 5 3.2
CPI 0.3 1 1.3
Public deficit
(% of GDP)
8.8 4.9 3.6

32. M3 creation within the Eurosystem intensifies
32Source: Círculo de Empresarios based on ECB, 2020.
Private sector credit and net purchases of government securities by the Eurosystem within the
framework of the ECB’s Asset Purchase Programme and the Pandemic Emergency Purchase
Programme (PEPP) are the main reasons for the M3 increase.
ECB balance sheet
YoY change (%)
M3 evolution by components
YoY change (%) and contributions to growth (pp)
0
2
4
6
8
10
12
14
16
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
Sep-19
Jan-20
May-20
M1 M3
-6
-4
-2
0
2
4
6
8
10
12
Jan-19
Mar-19
May-19
Jul-19
Sep-19
Nov-19
Jan-20
Mar-20
May-20
Jul-20
Credit to the private sector
Inflows from longer.term financial liabilities
Credit to general government from MFIs excluding the Eurosystem
General government debt securities
Net external monetary flows
M3

33. 33
Fiscal response to the Covid-19 crisis
Source: Círculo de Empresarios based on CaixaBank Research, Bruegel and the European Commission, 2020.
The Eurozone economies have responded decisively to the recession, implementing fiscal stimulus
packages to stimulate activity.
Public deficit, changes according to origin
% of GDP
At the same time, the impact of these measures on
future budget stability will be conditioned by the
spending structure.
Economies with more generous unemployment
programs will be more limited because they will
see a greater increase on their automatic
stabilizers.
Fiscal measures announced by the main Eurozone
countries.
% of GDP
Direct fiscal
measures
Tax deferrals
Guarantees and
endorsements
Spain 3.8 4.3 13.3
Germany 8.3 7.3 24.3
France 4.4 8.7 14.2
Italy 3.4 13.2 32.1
-10
-8
-6
-4
-2
0
Germany Spain France Italy
Discretionary Automatic stabilizers

34. Oil: the price of crude oil recovers
Source: Círculo de Empresarios based on EIA, 2020. 34
The price of a barrel of Brent increased 120% from April, boosted by the policy of output cuts by OPEC
and its allies in August (from 9.7 million barrels a day to 7.7), to around 45 dollars.
Upward pressures
2
1
Reactivation of the economy and world
demand for oil.
2
OPEC’s policy of output cuts.
1
Evolution of the price of a barrel of Brent
$ per barrel
Downward pressures
Factors involved in the evolution of the price of oil in
the short and medium-term.
Possible resumption of the trade war
between the US and China.
The future result of the US elections.3
A new worldwide wave of Covid-19
cases.
0
10
20
30
40
50
60
70
80
Oct-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20

35. 1000
1200
1400
1600
1800
2000
2200
2400
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
Jul-20
Stock markets (I): slight recovery of prices in the
summer…
World markets index (MSCI WORLD)
Points
Source: Círculo de Empresarios based on Bloomberg and CaixaBank Research, 2020.
+43.9%
Evolution of financial variables
June 30th – August 31st 2020 change
(%) (b.p.)
The recovery of activity and economic policy support
has boosted the positive evolution of the stock markets
and the reduction in risk premiums.
35
-20
-15
-10
-5
0
5
10
15
-20
-15
-10
-5
0
5
10
15
VIX Index S&P 500 Eurostoxx
50
Emerging
MSCI
Japanese
Yen
Emerging
currencies
Interest
rate
US (10
years)
Interest
rate
Germany
(10 years)
risk
premium
Spain, It,
Por

36. Stock markets (II): …followed by an adjustment in
September
Evolution of the Nasdaq
Points
Source: Círculo de Empresarios based on Bloomberg, 2020.
Main stock market indexes
January 2020=100
36
60
65
70
75
80
85
90
95
100
105
110
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20
Ibex 35 S&P 500
PSI20 MSCI Emerging markets
Eurostoxx 50
2000
4000
6000
8000
10000
12000
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
Jul-20

37. Stock markets (III): volatility is reduced compared to
March, but without reaching pre-Covil-19 levels
VIX Volatility index
Points
Source: Círculo de Empresarios based on Bloomberg, 2020.
-64.6%
37
0
10
20
30
40
50
60
70
80
90
Sep-00
Mar-01
Sep-01
Mar-02
Sep-02
Mar-03
Sep-03
Mar-04
Sep-04
Mar-05
Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
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
Sep-20

38. Fixed rent: risk premiums remain stable due to the ECB
stimulus packages
Risk premium evolution
German bond yield difference (pb)
Source: Círculo de Empresarios based on Bloomberg, 2020. 38
0
50
100
150
200
250
300
350
400
450
Sep-19
Sep-19
Oct-19
Nov-19
Nov-19
Dec-19
Jan-20
Jan-20
Feb-20
Mar-20
Mar-20
Apr-20
May-20
Jun-20
Jun-20
Jul-20
Aug-20
Aug-20
Sep-20
Spain
Greece
Portugal
France
Italy
Ireland
Risk premium, Sept-20
German bond yield difference (pb)
106
France
26.9Portugal
77.1
Spain
74.3
Italy
137.5
Belgium
23.0
Netherlands
11.3
Austria
16.0
Greece
152.1
Ireland
35.0

39. 39

40. 40
Executive summary
In Q2 2020, economic activity in Spain registered a sharp fall as a result of the impact of the exceptional lockdown
and hibernation measures adopted in order to stop the spread of Covid-19. In the second half of the quarter, with
the gradual easing of the lockdown measures, there was a gradual resumption of activity. Since August, this has
come to a halt due to the increasing number of cases.
According to the main national and international organizations, Spanish GDP will fall between 10.5% and 14.4%
yearly in 2020. In 2021, a recovery of between 4.1% and 7.5% yearly is expected. Regarding these forecasts, there
remains a high degree of uncertainty, and the final figures will be conditioned by the development of the
pandemic and the duration and intensity of the lockdown measures adopted to control it.
The Spanish economy is one of the most affected in the region, and it is expected that recovery will be slower,
primarily due to:
- The severity of the health crisis and the restrictive measures adopted to contain it.
- The weight of tourism, the hospitality industry and trade in the economy – the sectors most affected by the crisis.
- The reduced average size of companies (37% of GDP), which are more vulnerable to the economic impact.
- The high number of temporary contracts in the labour market (27% of the total).
- Reduced opportunities for teleworking during the lockdown due to the type of work (68% of workers unable to do
this).
On top of this, it is necessary to include the more vulnerable fiscal starting position, and the consequential
decreased capacity for indebtedness for applying stimulus policies. The worsening of the already high levels of
unemployment are also concerning, especially among the young.

41. Inequalities compounded by Covid-19
41
• An increase in unemployment, especially among those under the age of 25.
• Uncertainty on the future evolution of the economy on a national and international level.
• Limited room for maneuver for European monetary policy and Spanish fiscal policy.
• The decrease of international trade and disruption of global supply chains.
• The deterioration of the public accounts with a sharp increase in the deficit and debt.
• The sustainability of the Welfare State is brought into question.
• Reduced increases in productivity.

42. 42
* Forecast
Source: Círculo de Empresarios based on the Bank of Spain, European Commission, IMF, FUNCAS and OECD, 2020.
Recession in 2020 and gradual recovery
2%
2021*
4.1%/7.5%
Forecasts by the main national and international organizations (September/October 2020)
YoY change (%)
-10.5%/-14.4%
2020*2019
An uncertain scenario with forecasts conditioned by the intensity and duration of the second wave of Covid-19,
and by the efficiency of the economic policy measures to mitigate the effects on activity and employment.
2020 2021
OECD -11.1/-14.4 7.5/5
IMF -12.8 7.2
Bank of Spain -10.5/-12.6 7.3/4.1
FUNCAS Consensus -12 7.3
Government -11.2 7.2
European Commission -10.9 7.1

43. 2.5 3.2 2.8 3 2.8 2.3 2.2 2.1 2.2 2.1 1.8 1.7
-4.2
-21.7
2.2 2.7 3 3.1 2.5 2.2 1.5
1.1 1.5 1.2 1.4 1.7
-3.2
-14.7
-24
-22
-20
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Q22020
National demand Spain Foreign demand Spain
GDP Spain GDP Eurozone
*Available since 1970.
Source: Círculo de Empresarios based on INE, Eurostat and Bank of Spain, 2020.
43
GDP and contribution to national and foreign demand
YoY change (%) and pp
In Q2 2020 GDP fell 21.5% year-on-year (-4.2% Q1) and 17.8% quarter-on-quarter (-5.2 Q1). It is the worst year-on-
year record since Q2 2009 (-4.4%), and the worst quarter-on-quarter figure since reporting began*.
In terms of national demand, private
consumption fell 25.2% year-on-year and
investment by 25.8%. On the other hand,
public spending rose 3.1%. In the foreign
sector, exports of goods and services fell
38.1% year-on-year (against -5.6% Q1)
and imports by 33.5% (against -5.4% Q1).
Historic falls in economic activity
greater than those in the region
For Q3, the Bank of Spain forecasts a
decline of between 9.5% and 12.3% year-
on-year, and a rebound of between 13%
and 16.6% quarter-on-quarter.
The year-on-year fall has exceeded the
average decrease in the Eurozone by 6.8
pp.

44. New service sector PMI contraction in light of the
strength and number of new outbreaks
44Source: Círculo de Empresarios based on Markit and CIS, 2020.
Spanish PMIs, September
50=threshold (values > 50 indicate expansion)
Consumer confidence also fell to 49.5 points from 49.9 reached in August and remained at 36.2 points below that
registered in February (85.7).
Index of Spanish consumer confidence, September
100=threshold (values > 100 positive consumer outlook)
New outbreaks put a stop to the service sector PMI recovery. In September, it was at 42.4 points, 5.3 points less
than in August. The manufacturing PMI increased to 50.8 points (49.9 in August).
37.6
85.7
49.9
49.5
30
40
50
60
70
80
90
100
110
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
Sep-19
Jan-20
May-20
Sep-20
30.8
50.8
7.1
42.4
5
10
15
20
25
30
35
40
45
50
55
60
65
70
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18
Sep-18
Jan-19
May-19
Sep-19
Jan-20
May-20
Sep-20
Manufacturing PMI
Service sector PMI

45. The fall in industrial production moderates
45Source: Círculo de Empresarios based on INE, 2020.
Industrial production registered -5.7% year-on-year in August, the smallest fall in six months.
By sectors, the most affected were capital goods
(-9.9%).
Monthly index of Industrial Production
YoY change (%)
In July, in the Eurozone the fall was 7.7% year-on-year.
Industrial Production index by sectors, August
YoY change (%)
-5.7
-6.9
4.4
-6.5
-9.9
-2.4
-4.8
-12 -10 -8 -6 -4 -2 0 2 4 6
General index
Consumer goods
Consumer durables
Non-durable goods
Capital goods
Intermediate goods
Energy
-2.9 -2.1
-14.1
-34.1
-24.7
-14.4
-6.2
-5.7
-36
-34
-32
-30
-28
-26
-24
-22
-20
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20
Spain Eurozone

46. -5.9
-8
-9.1 -8.3
-6.1
-3.8
22.6
2.2 3.2 3 3.5 2.9 2.4
-2.3
-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) Affiliates (left axis)
Unemployment change (right axis) Affiliation change (right axis)
Persons %
46
* Registered as affiliates but without making any contributions.
Source: Círculo de Empresarios based on the Ministry of Labour, Migration and Social Security, 2020.
Registered unemployment and affiliation, September
Number of people and YoY change Sep-Sep (%)
Impact of the pandemic on employment
The number of affiliates registered with the Social Security rose 0.45% compared to August (84.013 people), to
18,876,389 affiliates. Compared to the same month in 2019, there were 447,062 fewer affiliates (-2.3%).
728,909 people included in the furlough scheme*,
83.1% through obligation (605,861 and 80.3% fewer
with respect to the maximum number on April 30).
In September, registered unemployment fell 0.7% compared to August (-26.329), to 3,776,485 unemployed
people, 22.6% more than in the same period in 2019.
Monthly variation in the number of affiliates and
unemployed people
People
-600000
-400000
-200000
0
200000
400000
Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20
Affiliates Unemployment

47. 47
Change in the number of those registered by sectors
Change (%)
Fall in the number of affiliates by sectors and
Autonomous Community
Change in the number of affiliates by Autonomous Community
Change (%)
Andalusia Murcia
Valencia
Balearic I.
Extremadura Castile-La
Mancha
Madrid
Castile Leon La Rioja
Asturias
Galicia
Cantabria
Basque C.
Aragon
Catalonia
Navarra
Canary I.
-4.2/2.6
-3.9/3.4
-4/2.3
-4/3.6
-3/0.3
-2.7/1.2
-3.7/-1
-3.7/-0.5
-4.3/0.7
-4,8/1
-3.3/2
-4,6/3.7
-6/1.2
-2.7/-1.5
-6.1/2.5
5/0.3
-7.9/2
Source: Círculo de Empresarios based on the Ministry of Labour, Migration and Social Security, 2020.
After the serious impact of Covid-19 on employment in March and April, the number of those registered with the
social security system gradually recovered between May and September, mainly in construction. The new
outbreaks registered since July have put a stop to the recovery of the service sector, in particular tourism.
% change Feb-Apr/
% change May-Sep
1.5
-4.2
-10.2
-5
-2.2
2.2
9.3
2.3
-15
-10
-5
0
5
10
15
Agriculture Industry Construction Services
12 March - 30 April 1 May - 30 September

48. 19
-6.1
4.3
0
5
10
15
20
25
30
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
12
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q12018
Q22018
Q32018
Q42018
Q12019
Q22019
Q32019
Q42019
Q12020
Q22020
2020*
Unemployment rate (right axis) Employment change
Unemployment change
48
* Stability Program forecasts 2020-2021.
Source: Círculo de Empresarios based on the Treasury Department, Eurostat, the European Commission, FUNCAS and INE, 2020.
Labour market deterioration in Q2
Employed, unemployed and rate of unemployment (Q2 Labour Force Survey)
YoY change (%) and % active population
The government, in its 2020-21 Stability Program, forecasts a rate of unemployment of 17.1% in 2020, and 16.9% in
2021. Forecasts by the European Commission are in line with this (18.9% and 17%, respectively), while those of
FUNCAS Consensus are 17.8% in both 2020 and 2021. For its part, the Bank of Spain expects between 17.1% and
18.6% in 2020 and between 19.4% and 22.1% in 2021.
In Q2 2020, the trend was bucked in
the labour market:
• Employment was destroyed (-6.1%
year-on-year) for the first time
since Q1 2014.
• Unemployment rose (4.3% year-
on-year) after 26 quarters of
reductions.
• This development places the Q2
2020 rate of unemployment at
15.3%.

49. 49
Source: Círculo de Empresarios based on Eurostat, 2020.
Rate of unemployment for those under 25, August 2020
% of workforce < 25 years old
Sharp increase of youth unemployment
In August, the rate of unemployment was at 16.2%, double the Eurozone average. Youth unemployment
rose to 43.9%, and was 11.1 pp more than one year ago, exceeding the Eurozone average of 25.8 pp.
Rate of unemployment in Europe, August 2020
% of workforce
18.3
16.2
9.7
9.2
8.1 8.1 7.5 7.4
4.6 4.4
3.9
0
2
4
6
8
10
12
14
16
18
20
Greece
Spain
Italy
Sweden
Eurozone
Portugal
France
EU
Netherlands
Germany
UK
Aug-19
Aug-20
43.9
39.3
32.1
28.4
26.3
19.8
18.1 17.6
12.9
11.3
5.8
0
5
10
15
20
25
30
35
40
45
50
Spain
Greece
Italy
Sweden
Portugal
France
Eurozone
EU
UK
Netherlands
Germany
Aug-19
Aug-20

50. 50
Unprecedented deterioration of the public accounts
Source: Círculo de Empresarios based on the Treasury Department, 2020.
Budget balance sheet PPAA, January-June 2020
% of GDP
Government deficit, Jan-Aug 2020
Millions € and % of GDP
In the first half of 2020, the consolidated deficit of Public Administrations reached 6.45% of GDP, tripling
that registered in the same period of the previous year.
Between January and August 2020, the government accumulated a deficit of €60.3 billion (5.4% del PIB), against
€15.3 billion between January and August 2019. This development is explained by the 18.9% increase in
expenditure and the 13.9% reduction in income (▼Tax revenue16.1%. For example: ▼VAT 15.6%, ▼ Corporate Tax
7.1%, ▼ Personal Income Tax 27.4%).
The Bank of Spain forecast a deficit for the whole of the year of between 10.8% and 12.1% of GDP, with this
lowering to between 7% and 9.9% in 2021.
-0.85
-4.37
-0.69
-0.67
-0.04
-0.26
-0.55
-1.15
-2,12
-6.45 -7
-6
-5
-4
-3
-2
-1
0
-7
-6
-5
-4
-3
-2
-1
0
Jan-Jun 19 Jan-Jun 20
Central Administration Autonomous Communities
Local Authorities Social Security
Public Administrations
128,364
10.31 %GDP
110,480
9.87 %GDP
-143,680
11.54 %GDP -170,775
15.26 %GDP
-15,316
-1.23 %GDP -60,295
-5.39 %GDP
-200.000
-150.000
-100.000
-50.000
0
50.000
100.000
150.000
Jan-Jun 19 Jan-Jun 20
Non-financial revenues Non-financial expenditure
Balance

51. 0.8
0.4
2
1.3
21.2
7.4
8.2
1.8
7.4
25.1
0 2 4 6 8 10 12 14 16 18 20 22 24 26
Total
Central
Administration
Autonomous
Communities
Local authorities
Social Security
Change Feb 19 - Jul 19 Change Feb 20 - Jul 20
1160000
1180000
1200000
1220000
1240000
1260000
1280000
1300000
Ene19
Feb19
Mar19
Abr19
May19
Jun19
Jul19
Ago19
Sep19
Oct19
Nov19
Dic19
Ene20
Feb20
Mar20
Abr20
May20
Jun20
Jul20
51
Escalation of the public debt
Source: Círculo de Empresarios based on the Bank of Spain , 2020.
Public debt
Millions €
Debt by administration levels
Change Feb-Jul (%)
Between February and July, public debt increased €89.5 billion as a result of the crisis, and was above 110% of GDP,
compared to 95% before the pandemic. The rise in Social Security debt (25.1%) stands out, followed by that of the
Central Administration (8.2%) and Local Authorities (7.4%).
According to predictions by the Bank of Spain, public debt could reach between 116% and 120.6% of GDP in 2020,
and between 115.4% and 125.6% in 2021.
+7.4%

52. Increased spending on pensions weakens the viability
of the pensions system
Source: Círculo de Empresarios based on the Ministry of Inclusivity, Social Security and Migration, 2020. 52
Monthly pensions payment amount
Billions €
Current pensions
Nº
Since 2010, the monthly pensions payment has increased 44.3%. This increase is explained by the pension
revaluation and annual increase, the higher amount for the new retirement benefits (€1,517 /month vs. €1,393
/month in 2010) and the increase in the number of current pensions (12.1%), which will be exacerbated by the
aging population and “baby boomer” retirement.
The biggest costs in the system are not covered by increased income. The impact of the current health system
crisis in the economy, and the perspectives point to a fall in the number of contributors to the system due to a loss
of employment and those contributing to the system. In the first half of 2020, social security contributions fell 3.8%,
against an increase of 3% in pension expenditure.
8200000
8400000
8600000
8800000
9000000
9200000
9400000
9600000
9800000
10000000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Sep-20
+12.1%
Impact Covid-19
-0.4%
6,867,948
7,883,828
8,881,028
9,759,800
9,911,425
6500000
7000000
7500000
8000000
8500000
9000000
9500000
10000000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 sep-20
+44.3%
Sep-20

53. In the case of households, the granting
of consumer credit fell the most (28.1%).
Accumulated credit for the acquisition
of a home fell 7.6% year-on-year.
Financing for non-financial corporations
accumulated €258.8 billion between
March and August, with over 51.1%
being for credit amounts above €1
million with these increasing by 18.4%
year-on-year.
Business financing increases and household financing
decreases
Source: Círculo de Empresarios based on the Bank of Spain, 2020.
The accumulated new credit grant for households between March and August 2020 fell 11.1% year-on-year. On
the other hand, credit for non-financial corporations increased 15% year-on-year.
New non-financial private sector credit operations, March-August 2020
Millions €
53
0
50000
100000
150000
200000
250000
300000
350000
400000
0
10000
20000
30000
40000
50000
60000
70000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Consumer credit Households total credit Non-financial corporations credit (right axis)

54. -0.5
-0.4
0.4
-0.2
-0.3
-1
0
1
2
3
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
Jul-20
Aug-20
Sep-20
Spain CPI Spain Core CPI* Eurozone CPI
*Ex energy and unprocessed food
54
Source: Círculo de Empresarios based on INE y Eurostat, 2020.
CPI fall moderates
Prices development
YoY change (%)
In August, prices of “Covid-19 goods”1
increased 1.7%, while “Covid-19
services”2 fell 2.1% year-on-year, 8 tenths
less than in July, mainly as a result of the
increase in electricity prices compared
to a fall registered in 2019.
In August, the CPI decreased 0.5% year-on-year, against the increase of 2.2% in the same month the previous
year. In the Eurozone, prices fell 0.2% year-on-year.
1 Food, drink, tobacco and cleaning products, as well as non-durable household products, pharmaceutical products, animal feed and personal care products.
2 Housing and garage rental, water distribution, sewerage and garbage collection services, as well as community charges, electricity, gas and heating oil, and telephone, music and TV
streaming, insurance, bank commissions and funeral services.
The annual Harmonised CPI rate was
–0.6%, one tenth above that of July.
In September, the CPI flash estimated
registers a decrease of 0.4% in Spain and
of 0.3% in the Eurozone.

55. 55
Trade balance, January-July 2020
Change with respect to the same period the previous year
Source: Círculo de Empresarios based on the Ministry of Industry, Commerce and Tourism, 2020.
Downturn in the international trade of goods
Importaciones
Capital goods
Chemicals
Food, drink and
tobacco
Exports ▼ 14.6% €147,489.9 M
Imports ▼ 18.2% €155,366.5 M
DEFICIT ▼ 54.2% €-7,876.6 M
Energy deficit ▼ 35.4%
Imports of energy goods fell 36.7%
Sector distribution, January-July 2020
% of the total
Exports
Food, drink and
tobacco
Capital goods
Chemicals
20.5
19.2
16.4
22.1
18.9
12.7
Goods trade evolution, January-July 2020
YoY change (%)
The fall in international trade and disruption in the global value and supply chains has had a negative
effect on goods exports and imports.
Geographic distribution, January-July 2020
% of the total
-80
-60
-40
-20
0
20
40
60
80
100
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Deficit (right axis) Exports Imports Exports Imports
Europe 73 60.2
EU 60.6 50.9
Germany 11.5 12.3
France 16 10.2
Italy 7.7 6.3
UK 7.5 3.8
America 10.1 11
Asia 9.4 21.3
China 2.9 10.6
Africa 5.9 7.2
Other 1.6 0.3

56. The fall in direct investment flows persists
56Source: Círculo de Empresarios based on Datainvex, 2020.
In the first half of 2020, FDI in Spain fell 37.1% compared to the same period in 2019. For its part, Spanish
foreign investments registered -28.9%. All this has occurred within an international context marked by the
Covid-19 pandemic, in which the UNCTAD forecasts a fall of direct investment flows of 40% yearly for 2020.
Evolution of FDI flows, January-June 2020
Millions €
-30000
-20000
-10000
0
10000
20000
30000
Jan-Jun2008
Jan-Jun2009
Jan-Jun2010
Jan-Jun2011
Jan-Jun2012
Jan-Jun2013
Jan-Jun2014
Jan-Jun2015
Jan-Jun2016
Jan-Jun2017
Jan-Jun2018
Jan-Jun2019
Jan-Jun2020
FDI inflows FDI outflows
-28.9%
annual
-37.1%
annual

57. 0
2000000
4000000
6000000
8000000
10000000
12000000
January February March April May June July August
2019 2020
57
The recovery of tourism is crippled by the outbreaks
Source: Círculo de Empresarios based on INE, Frontur, Familitur and Egatur, 2020.
Tourist visits
Number of people and YoY change (%)
Total tourism spending August and March-August
accumulated
Millions € and YoY change (%)
The average spend per tourist was €1,006, 13.1% less than a year ago, and the average duration of the trip was 8.7
days, 0.8 days more than in August 2019.
In August, Spain received 2.4 million international tourists, 75.9% fewer than in 2019. Spending, which fell 79%
year-on-year, was at €2.4 billion.
It was hoped that domestic tourism would compensate in part for the loss of international visitors, although in Q2
2020, trips by residents fell 82.1% year-on-year as a result of measures related to the restriction of movement. Total
tourism spending fell 89% year-on-year.
49543962
7130689
2019 2020
Accumulated March-August
▼85.6%
annual
0
10000
20000
30000
40000
50000
60000
March-August August
2019 2020
▼86.7%
▼79%

58. Business formation stagnates
58
Source: Círculo de Empresarios based on INE, 2020.
Business formation
YoY and monthly change (%)and number of companies
Between March and August, business formation fell 27% on average year-on-year. The biggest falls were in April
(-73.4%) and May (-55.9%).
In August, business formation fell 24.7%
compared to the previous month,
although in year-on-year terms
increased 7.1%.
By Autonomous Community, the year-
on-year decreases in Navarra (-23.6%)
and Extremadura (-21.9%), stand out.
However, business formation was
significant in Balearic I. (+66.4%), and
Cantabria (+45.2%).
-3.8
-9.2
-28.3
-73.4
-55.9
-9.4
-2.4
7.1
-9000
-7000
-5000
-3000
-1000
1000
3000
5000
7000
9000
-100
-80
-60
-40
-20
0
20
40
60
80
100
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20
% annual change % monthly change New companies (right axis)

59. Pressure on the risk premium
59Source: Círculo de Empresarios based on Reuters and Bloomberg, 2020
The risk premium remains stable at around 75 bps after reaching 150 bps in the last week of April due to ECB public
debt purchasing policy.
Spanish, Portuguese and Italian risk premiums compared
to the German 10-year bond
bps
The main rating firms maintain their rating for Spain but have identified specific risks in our economy. Among
them, the high levels of public debt, the delay in the adoption of structural measures, and the lack of agreement
to approve the 2021 national budget stand out, as well as the increase in the dependency rate.
Rating España
2010 - August 2019
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-20
Jul-20
Aug-20
Sep-20
Spain Italy Portugal
Feb-10
Aug-10
Feb-11
Aug-11
Feb-12
Aug-12
Feb-13
Aug-13
Feb-14
Aug-14
Feb-15
Aug-15
Feb-16
Aug-16
Feb-17
Aug-17
Feb-18
Aug-18
Feb-19
Aug-19
Feb-20
Aug-20
Moody´s S&P Fitch
Aaa AAA
AA+
AA
AA-
Aa1
Aa2
Aa3
A+
A
A-
A1
A2
A3
BBB+
BBB
BBB-
Baa1
Baa2
Baa3
Rating

60. 60Source: Círculo de Empresarios based on Reuters, 2020
Continued uncertainty in financial markets
Stock market evolution
January 2018=100
The Ibex 35 is showing no signs of recovery, while European stock exchanges do so gradually. For its
part, S&P 500 has recovered its pre-Covid-19 levels.
50
60
70
80
90
100
110
120
130
140
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
Jul-20
Aug-20
Sep-20
S&P 500
Eurostoxx 500
Ibex 35

61. www.circulodeempresarios.org
The Quarterly Reportis 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 guaranteeits accuracy or take any responsibilityfor 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.