Home » News » CEOE-Tenerife estimates that unemployment will soar in the Canary Islands up to 39% | Radio Club Tenerife

CEOE-Tenerife estimates that unemployment will soar in the Canary Islands up to 39% | Radio Club Tenerife

Macroeconomic normality will return to the Canary Islands in 2022. It is one of the main conclusions that the CEOE-Tenerife has revealed after presenting the Economic Situation Report for the First Quarter of 2020. That “normality”, however, “will place us at levels , if anything, December 2019 ”, said the insular president of the Spanish Confederation of Business Organizations, José Carlos Francisco.

The employers glimpse three scenarios derived from the health crisis and subject to an ineffective political-economic response. According to the director of the consulting firm Corporación 5, José Miguel González, the first forecast, dreamy, points out that in eight weeks economic activity will be reactivated with a drop in the GDP of the Canary Islands of between 6 and 10 percent and an increase unemployment with a ceiling at 27 percent. This is an “impossible” omen, the economist has assured.

The second scenario, the “probable reality” according to experts, contemplates six months of instability in productive activity with losses of between 9,200 and 13,900 million euros. In this case, the GDP would fall between 20 and 30 percent and unemployment would escalate until it affected more than 35 percent of the population. Furthermore, between 40 and 60 percent of the economy would be affected.

“Probably what is going to happen is that the Gross Domestic Product will fall by 25 percent,” said Francisco, who adds for this 2020 an unemployment rate set at 39 percent. Furthermore, the CEOE-Tenerife guarantees that the socio-economic impact of Covid-19 will be “greater than the Spanish average, around double, and, in turn, that of the European one.

Asked about the economic impact of a second wave of infections, the island president has asserted that the outlook would continue in the second pro scenario in its hardest face, with a strike that would reach 43 percent of the population and a drop in GDP of the 30 per cent.

In this sense, González has assured that it is “a reality bath” that must entail a political response. For the CEOE, the decisions to be made (in full negotiation of the Pact for the Social and Economic Reactivation of the Canary Islands) include the palliative measures that offer liquidity to companies, the extension of ERTEs “until the end of the year” and a debt to long term of at least 500 million euros.

As for the third scenario, that of “isolation and decline”, the employers’ association assures that it would occur after 10 months of zero activity with a setback of the GDP that could reach 50 percent, loss of income of up to 885 million euros and a unemployment rate that would touch 60 percent.

The economic situation of families

Although the CEOE estimates that the labor force rate will be maintained and points to a “better” financial situation for companies and families, “the crisis will be shorter but more intense” than that of 2008, González said.

In this regard, he assured that the indebtedness of these actors in 2010 was around 55,000 million euros, while currently it is close to 30,000 million. “The crisis will be shorter but more intense” than that of 2008, González has had an impact, so the efforts must have a “short-term” result.

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