June 30, 2020 / 10:10 AM / 9 days ago

Spain needs economic reforms to avoid "chronic" debt, says central bank

MADRID, June 30 (Reuters) - Spain’s traumatised economy needs profound structural reforms to avoid “chronic” levels of public debt that could hinder long-term growth, the Bank of Spain said on Tuesday.

One of the nations most affected by the coronavirus, Spain is heading for its worst economic performance on record in 2020, with a contraction of 9%-11.6% forecast by the Bank of Spain.

“In a hypothetical scenario where no structural fiscal effort is made by the authorities in the next ten years, the ratio of public debt to GDP would remain well above 100% at the end of 2030,” the central bank said in its annual report.

The report echoed comments by Bank of Spain governor Pablo Hernandez de Cos stressing the importance of reforms while also predicting that some recovery for the tourism-dependent economy could begin later this year. (Reporting by Jesús Aguado and Emma Pinedo; Editing by Andrew Cawthorne)

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