Macroeconomic environment

The global COVID-19 pandemic, which first emerged in the 1st Quarter of 2020, and the consequent restrictions implemented by governments triggered a recession unprecedented in recent history, producing a contraction in world GDP of around 3.7% on an annual basis in 2020.
In this regard, the measures to counter the recession implemented in the advanced economies involved a range of support programs for the various productive sectors, the labor market and domestic demand, as well as ultra-expansionary monetary and fiscal policy measures.

  Economic measures
  • Strict restrictive measures at the beginning of the pandemic and strong resilience of the economy, supported mainly by high spending on infrastructure
United States
  • Expansionary fiscal policies to support families and companies
  • Cut in main interest rate to 0-0.25% and a program for the purchase of securities by the Federal Reserve
Euro area
  • Massive government subsidies and other labor market support measures
  • Main interest rates at the European Central Bank unchanged, with no adjustment until the target inflation rate of 2% is achieved (the interest rate on main refinancing operations at 0% and the rate on the deposit facility of the ECB a negative 0.5%)
  • Pandemic Emergency Purchase Program (PEPP) with envelope of €1.85 trillion
  • €750 billion recovery plan (Next Generation EU), divided between loans (€360 billion) and grants (almost €390 billion)
United Kingdom
  • Subsidies for the labor market, Coronavirus Job Retention Scheme, and ultra-expansionary monetary and fiscal policies

In Latin America, one of the most severely affected areas in the world, macroeconomic developments were strongly impacted by the pandemic and the diverse responses of the individual governments:

  • in Argentina the pandemic has further exacerbated existing structural problems with growth and fiscal stability (GDP down 10%), compounded by doubts about the outcome of ongoing negotiations with the International Monetary Fund over the restructuring of public debt, which are weighing on the recovery;
  • the Chilean economy has been among the most resilient in Latin America thanks to its considerable openness, with exports driven by the Chinese recovery. Doubts about the prospects for growth persist, however, given the strong political uncertainty in the country;
  • in Brazil, a broad family support program prevented a severe recession, but it undermined the economic and fiscal soundness of the country, with an estimated deficit of over 15% of GDP. For 2021, projections remain positive given the country’s large foreign currency reserves and its low exposure to foreign debt payments;
  • in Colombia, despite the severity of the consequences of the pandemic (GDP contracted by 7.5%), expectations for 2021 are improving given the recovery of the oil sector and the absence of political instability in the medium term;
  • although Peru was among the hardest hit countries (GDP down 12%), its good fiscal and financial position together with rising mineral prices put the country among the area’s favorites to post a strong economic recovery in the short term despite the political instability linked to the elections scheduled for next April, which could worsen the economic outlook.

In general, despite the fact that the prospects for an exit from the pandemic in 2021 have improved thanks to progress in vaccine development and the beginning of vaccine distribution, uncertainty linked to the spread of new cases and the possible imposition of new restrictions persists, with its elimination depending significantly on the progress of vaccination on the global scale.

GDP growth and inflation(1)

  GDP Inflation  
  2020 2019 2020 2019 Change
Italy -9.0 0.3 -0.1 0.6 -0.7
Spain -11.1 2.0 -0.3 0.7 -1.0
Portugal -8.3 2.2 - - -
Greece -9.6 1.6 - - -
Argentina -10.5 -2.1 42.0 53.5 -11.5
Romania -5.3 4.2 2.6 3.8 -1.2
Russia -3.8 1.3 3.4 4.5 -1.1
Brazil -4.4 1.4 3.3 3.7 -0.4
Chile -6.1 1.0 3.0 2.3 0.7
Colombia -7.5 3.3 2.5 3.5 -1.0
Mexico -8.7 - 3.4 3.6 -0.2
Peru -11.3 2.2 1.8 2.1 -0.3
Canada -5.5 1.9 0.8 2.0 -1.2
United States -3.5 2.2 1.2 1.8 -0.6
South Africa -7.3 0.2 3.3 4.1 -0.8
India - - 6.8 3.7 3.1

(1) The GDP and inflation figures are the best estimate available at the publication date and are subject to revision by national statistical institutes in the coming months.
Source: national statistical institutes and Enel based on data from ISTAT, INE, EUROSTAT, IMF, OECD and Global Insight.

Exchange rates

  2020 2019 Change
Euro/US dollar 1.14  1.12  1.79%
Euro/British pound 0.89  0.88  1.14%
Euro/Swiss franc 1.07  1.11  -3.60%
US dollar/Japanese yen 107  109  -1.83%
US dollar/Canadian dollar 1.34  1.33  0.75%
US dollar/Australian dollar 1.45  1.44  0.69%
US dollar/Russian ruble 72.29  62.99  14.76%
US dollar/Argentine peso 70.68  48.17  46.73%
US dollar/Brazilian real 5.16  3.94  30.96%
US dollar/Chilean peso 791.61  702.85  12.63%
US dollar/Colombian peso 3,693  3,280  12.59%
US dollar/Peruvian sol 3.50  3.34  4.79%
US dollar/Mexican peso 21.48  19.25  11.58%
US dollar/Turkish lira 7.02  5.68  23.59%
US dollar/Indian rupee 74.08  70.42  5.20%
US dollar/South African rand 16.46  14.45  13.91%

The IBOR reform

The IBOR reform is a fundamental reform of the benchmarks used to determine interest rates being conducted by the regulatory bodies in the wake of various instances of rate manipulation by the banks that contribute data for their calculation. The reform includes the replacement of certain benchmark indices, including the Euribor and LIBOR, with alternative risk-free benchmark rates.

For more details on the reform of the IBORs and the results of the analyses conducted by the Group, please see note 47.1 of the consolidated financial statements.