Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the world losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020, and many experts predicting the potential onset of recessionary environments.

Spain is among the worst-affected nations globally, standing second in Europe after the UK with over 249,000 infections and more than 28,000 deaths. The pandemic has caused significant economic disruption and reversed Spain’s GDP growth. With the government now easing lockdown restrictions in a phased manner, a gradual recovery in he economy and in banking industry could be seen.

This report focuses on the impact of the Coronavirus outbreak on the Spanish economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData’s pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

- Spanish retail savings and investments are forecast to grow by a mere 0.6% over the course of 2020 as the economy has come to a standstill thanks to the impact of COVID-19. While the performance of IBEX 35, Spain’s flagship index, started to revive as a result of the gradual easing of lockdown measures across the country, the fragile state of Spain’s economy coupled with fears of a possible outbreak of a second wave of virus infections will continue to weigh heavily on demand for risk assets throughout the year. Retail equity and mutual fund holdings are expected to take the brunt of the economy’s slowdown, with respective declines of 24.6% and 19.4% anticipated.
- Retail deposits and holdings, on the other hand, are set to fare better than initially expected courtesy of a flight to safety away from risk assets as well as a move away from cash holdings. However, more pronounced declines in risk asset holdings result in the 2020 total retail holdings forecast standing 1.1 percentage points lower than before the onset of COVID-19.
- The effects on the different segments that make up the HNW market will be disproportionate. The financial services and investments sector, which is the largest contributor to Spanish HNW wealth, has already taken a significant hit, as indicated by the 43% decrease of the IBEX 35 Banks index since the beginning of the year until June 22, 2020.
- The worst hit sector has been the hospitality and tourism industry, which suffered due to strictly imposed travel restrictions and a slump in demand among travelers globally. However, the sector is expected to gradually revive with the easing of lockdown restrictions and the reopening of borders for international travel.
- Falling in the defensive category, the healthcare and tech and telecommunication sectors - the second- and third-largest contributors to HNW wealth - are expected to be less severely impacted thanks to more robust demand patterns.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Spanish retail savings and investments industry.
- Understand the key market trends, challenges, and opportunities in the Spanish retail savings and investments industry.
- Receive a comprehensive insight into the retail liquid asset holdings in Spain, including deposits, mutual funds, equities, and bonds.