That is to say, if economic activity in Q3 has managed to pick up in keeping with the more benign scenario of the two projected in September, the path of the disease and the necessary containment measures introduced in recent weeks might be running more in step with the assumptions included under scenario 2. Thus, for example, the composite PMI, which habitually acts as a leading indicator of the future performance of the economy, fell in Spain in August and September, interrupting the rising path on which it had held in the previous months. Further, the improvements seen since the latter part of Q2 in Google’s daily mobility indicators, and in those for air and motorway traffic, are estimated to have halted (and even reversed in some cases) since midJuly. 9  This economic recovery path in Q3, and the fact that, in Q4 to date, the epidemiological situation has worsened acutely in Spain and in most of our neighbouring countries, have prompted the relatively widespread application of fresh restrictions on mobility and activity in certain sectors. On the basis of these developments, it seems plausible to anticipate that economic activity in the final stretch of the year and in early 2021 will be less dynamic than was expected under September’s scenario 1 (which envisaged a quarter-on-quarter increase of 3.9% in 2020 Q4 and of 1% in 2021 Q1). However, it is important to note that the volume of conjunctural information currently available to us to estimate economic developments in Q4 is still very limited.
04.11.2020  Testimony before the Parliamentary Budget Committee in relation to the Draft State Budget for 2021* Pablo Hernández de Cos Governor  *Traducción al inglés del discurso original en español  Ladies and gentlemen, I appear before this Committee as part of the process to discuss and approve the State and Social Security Budget for 2021. The main aim of this Budget should, in my view, be to provide for the recovery of the Spanish economy in the coming quarters and to mitigate the considerable adverse impact caused by the COVID-19 pandemic to our economic growth and welfare. I shall begin by first describing the recent behaviour of the Spanish economy and, against a background marked by exceptional uncertainty, its possible course in the coming quarters, in light of the Banco de España’s projections. This description will allow me to assess the Government’s macroeconomic forecast which, as is habitually the case, frames the Draft Budget. Secondly, I shall offer my view of the main aspects of the Draft Budget for 2021, including the fiscal policy stance, its composition and the risks to the budget deficit target being met. Lastly, I shall set out what I consider to be the most significant challenges for Spanish fiscal policy in the medium term.