The US monthly unemployment rate posted in April its biggest increase (over 10 pp) in the related time series to 14.7%, the highest level since the Great Depression in the 1930s. Preliminary estimates in the euro area point to a 3.8% decline in GDP in Q1. 5  As you know, Spain has been one of the countries hardest hit by the health crisis and, subsequently, by the impact of the containment measures on economic activity. More than two months after the state of alert was decreed, we now have significant statistical information on the scale of the shock to the Spanish economy. Specifically, a preliminary estimate by INE (National Statistics Institute) indicates that GDP fell by 5.2% in 2020 Q1, despite the fact the lockdown only affected the last fortnight of this period. Should this be confirmed, this quarterly decline in GDP in 2020 Q1 will be double that observed in the related quarter in 2009, at the height of the global financial crisis. As is to be expected, there has been a particularly acute reduction in the value added of certain services sectors, and construction has also been severely affected. 6  In the labour market, the pandemic and the measures adopted to contain it are also leaving a deep imprint. The figures on Social Security registrations reveal a reduction of almost 950,000 in numbers employed between mid-March and 30 April. Job destruction was mainly concentrated in the second fortnight of March (almost doubling the loss of jobs between end-November 2008 and end-January 2009).
All these measures, along with those relating to liquidity provision by the ECB, are intended to help banks better withstand this crisis and to operate as an active lever for promptly overcoming it. And there are already signs that this is proving to be the case. The containment measures adopted to halt COVID-19 contagion are entailing a very sharp drop in the revenues of many non-financial corporations. This has significantly increased their liquidity needs, which they are largely covering through resort to bank financing. Indeed, the latest (and as yet provisional) data, for March, reveal a year-on-year rise of just over 50% in the flow of new lending granted by banks to firms. This includes both new business and increases in the principal that may be drawn down in operations previously entered into (which have almost doubled). This demand for funding may have been met under better conditions thanks, on one hand, to the ECB’s support measures to bank financing, which have helped banks obtain funds under favourable terms; and, on the other, to the government-approved programme of public guarantees on loans to firms, which has mitigated the possible reluctance of banks to incur greater risks in a setting of high uncertainty and growing concern over credit risks. Hence, on the data published to 13 May, a total of 371,070 operations have been entered into under the public guarantee programme, of which 98% relate to SMEs and the selfemployed.