Spain’s tourism in the Corona trap – economic downside risks for Southern Europe high it is a heavy blow for the Spanish tourism sector. After numerous warnings from several European countries, Germany also issued a travel warning for almost all of Spain. The number of newly infected persons had risen sharply again in recent weeks. This development is a shock inasmuch as German holidaymakers represent the largest cross-border visitor group in Spain after the British.
A difficult autumn is imminent. A travel warning is not yet a travel ban. However, the warning is likely to send a noticeable signal – because returning from a risk area involves unpleasant procedures for the traveller. For the heavily battered tourism industry in Spain, the recovery in the third quarter should thus be noticeably slowed down again – with consequences for the overall economy. This is because Spanish tourism contributes directly and indirectly to around 18 percent of gross value added.
Despite the unfavorable development, we are sticking to our forecast for economic growth in 2020 of currently -13.0 percent. We had already implicitly based our more pessimistic calculation on a temporary slowdown in the recovery of the Spanish tourism sector. This does not mean, however, that the forecast could not be further adjusted downwards in the future. Much now depends on whether Spain gets the number of infected persons under control and to what extent other European countries follow with travel warnings.
The focus is not only on Spain. In principle, there is currently an increased downside risk in the economic forecasts for all European countries if they show a particularly high dependence on foreign tourism – this is particularly true for the southern European countries.