Economic impact of government measures during the covid crisis

The report analyzes the economic impact of the exceptional measures taken by the government during the coronavirus crisis. Specifically, it focuses on the state guarantee lines program through the Instituto Oficial de Crédito (ICO) and on the temporary suspension of contracts (ERTEs).

This analysis should help to evaluate and design the most advisable economic policies to reactivate our economy going forward.

The main conclusion of the report would be that, out of the economic measures to alleviate the effects of the crisis that the government has taken, those that directly support companies are the most effective for sustaining production, activity and employment (due to their multiplier effect on the economy and its greater relation with other economic sectors). They are more effective for the economy than direct public intervention aimed at workers and citizens.

The report estimates the direct positive impact on activity of the two most relevant measures:

• ICO guarantee lines would have an impact of 3.2% of GDP (GVA) and 663,000 jobs. In the long term and considering indirect effects, it would generate 8.6% of GDP (GVA) growth and 1,651,000 jobs.
• Temporary suspension of contracts have had an impact of 0.7% of GDP (GVA) and 151,000 jobs. In the long term and considering indirect effects, it could reach 4.6% of GDP (GVA) and 906,000 jobs.