The Bank of Spain warned this Tuesday that a hypothetical halt in imports of energy raw materials from Russia could have a significant impact on Spain’s economy, with an impact of between 0.8% and 1.4% on GDP and a Increase in inflation between 0.8 and 1.2 points Percentage during the first year in respect of a scenario without such restrictions.
according to the report’The economic consequences of a hypothetical business shutdown between Russia and the European Union‘ In the most likely scenario for the Bank of Spain, published this Tuesday, the reduction would be 1.1% of GDP and the increase in inflation would be 0.9 percentage points.
The body, led by Pablo Hernández, warned, “Difficulty converting these products in the short term would mean a reduction in energy supply and a worsening of the current inflation episode, both of which would burden economic activity.” of Cos in the report.
In any case, the Bank of Spain has underlined that given that the reliance on Russian energy is lower in Spain than in the rest of the European economies, The impact on the economy will be much less,
Greater influence on Germany, France and Italy
In this regard, he pointed out that in the case of other European economies, the impact would be between 1.9% and 3.4% for Germany, 1.2% and 2% for France, and 2.3% and 3.9% for Italy. The impact on the EU as a whole would be between 2.5% and 4.2% of GDP and an increase in the inflation rate by between 1.6 and 2.7 points.
“These values should be considered as short-term effects and whose magnitude will decrease as the replacement capacity of Russian energy imports increases,” the agency reported.
and that energy raw materials from Russia are products that may have import restrictions activity has a greater impact and prices of European economies.
The intensity of influence will be skewed among European Union (EU) countries depending on their energy dependence on Russia. For example, about 18% of energy mining products (gas and coal) and 9% of petroleum products consumed in the European Union are imported from Russia, compared to 3% and 2.5%, respectively, in the case of Spain.
However, if the interruption in imports only affected energy mining (which includes both natural gas and coal), the impact would be greater in the case of a suspension of petroleum products imports. Specifically, the estimated proportion within the total effects would be 70% and 30%, respectively.
Just yesterday, EU leaders reached an agreement Russian oil ban partially, “It immediately covers more than two-thirds of Russia’s oil imports, cutting off a substantial source of funding for its war machine,” European Council President Charles Michel explained after the meeting in Brussels.
Transport and industry, the most affected sectors
In general terms, the most affected sectors will be those that are more intensive in energy use, such as transportation, the basic metal industry or the chemical industry, while the impact will be more limited for service sectors, such as real estate, whose activity is hardly affected. Will happen.
However, the contraction of surplus value in each sector is not only due to a direct effect due to higher energy prices, but also due to The spread of these direct effects through production chains.
For this reason, cost increases in some sectors with a central role in production chains, for example, the transportation or chemical industry, will affect the rest of the branches, regardless of the energy intensity of the latter.
Furthermore, the spread of effects through production chains does not occur exclusively between regions of the same country: shocks. European supplier of Spanish industries The focus will be on GDP and price level Spain,
For example, the Bank of Spain states that some sectors of the Spanish economy, such as vehicle manufacturing or pharmaceutical production, are highly dependent on their customers and suppliers located in other EU countries. Thus, these sectors would be indirectly exposed to production limits in the rest of the countries due to energy restrictions.
Notably, the cessation of energy imports from Russia would result in a roughly half the fall in GDP estimated for Spain due to the impact of trade flows with the rest of the EU.
The total cut of Russian energy would add 1.2% to the Spanish CPI