##ity needs in the period spanning the second and fourth quarters of this year will increase as a result of the pandemic by almost 10 pp, to 70 %. the information on bank lending shows that firms are resorting to this source of financing to cover a sizeable portion of their liquidity needs. specifically, the outstanding balance of nfcs ’ borrowing from national credit institutions increased at a record - high pace, shifting from an annual contraction of 1. 1 % in february to an annual expansion of 8. 1 % in june. that said, this increase eased to 7. 2 % in july. one of the key factors behind the rise in credit over these months was the progressive activation of the official credit institute ’ s guarantee facility for nfcs and individual entrepreneurs, which proved particularly favourable to smes. in fact, of the €174 billion lent to nfcs from december 2019 to june 2020 via new lending business, €71. 5 billion ( 41 % ) corresponded to guaranteed loans. as a result, the sector ’ s aggregate debt - to - gdp ratio has risen for the first time since 2010, to 82 % in 2020 q2 ( the highest level since 2017 ), owing both to the increase in debt and to the decline in gdp. true, the intensity of these rises will be corrected to some extent when the gdp data for the coming quarters are incorporated. but the simulations by the banco de espana also suggest a deterioration in the financial position, measured as each firm ’ s net debt relative to its net assets. this would be greater in the sme segment and in the sectors most affected by the pandemic. as was the case with firms, households ’ financial position improved significantly following the previous global financial crisis. at the same time, mortgage - related lending standards have been much more prudent, although consumer credit has been growing at high rates in recent years and certain groups of households have remained in a situation of vulnerability. however, household income has been considerably cut in the current crisis, owing to the reduction in hours worked and the increase in unemployment. households ’ gross disposable income fell by 8. 8 % year - on - year in the first half of 2020. in parallel, lending to households has fallen off in recent months as a result of the decline in new lending business. the reduction has been more marked in the consumer credit segment, while new financing for house purchases fell less sharply. overall, although the moratoria on loans,

in certain services such as hospitality, which is particularly affected by the social distancing measures. moreover, in absolute terms, the sizeable fall in actual registrations in this sector is indicative of the importance of tourism for spain ’ s economy. see box 1 ( “ macroeconomic scenarios for the spanish economy ( 2020 - 2022 ) ” ) in the “ quarterly report on the spanish economy ”, economic bulletin, 3 / 2020, banco de espana. in the coming quarters employment, in terms of hours worked, is expected to follow a very similar path to that of economic activity, showing declines of over 10 % in 2020 and a subsequent recovery. meantime, the increase in unemployment is being contained in the short term by the resort to furlough arrangements. in annual average terms, the unemployment rate is expected to rise significantly this year ( to 17. 1 % of the labour force under the first scenario and to 18. 6 % under the second ) and also in 2021, before starting to descend in 2022 ( when, in annual average terms, it would stand at 18. 2 % and 20. 2 % under the respective scenarios ). both scenarios forecast inflation to hold at a moderate pace over the projection horizon. core inflation has slowed notably in recent months as a result of the weakness of demand stemming from the pandemic. looking ahead, the persistence of a high degree of cyclical slack will mean inflation in non - energy industrial goods and in services will continue to run at relatively low - though growing - rates until end - 2022. the risks underlying the scenarios for economic activity published by the bank remain tilted to the downside. and more unfavourable developments than those contained in the second scenario, i. e. the harsher of the two considered, cannot be ruled out. in particular, in light of the recent course of the pandemic, we cannot preclude the resort to more severe lockdown measures than those envisaged in the scenarios. moreover, there is much uncertainty over how long will be needed before we have an effective medical treatment, and there are some risks that it will be delayed beyond mid - 2021. lastly, uncertainty remains on the external front, especially concerning the possibility of the brexit negotiations concluding without an agreement at the end of the transition period or of us - china trade tensions worsening. however, as i shall set out later, the launch of the next generation eu ( ngeu ) european recovery fund, which was