. the improved cyclical position and the significant reduction in the risk premium and interest rates on public debt have a major direct positive effect on public finances, in contrast to the adverse pressure wielded by these variables in recent years. the adjustment in public finances undertaken by the spanish economy is three - pronged : the gradual reduction in the budget deficit in line with the targets set, the strengthening of the fiscal governance framework and the reform of the pensions system. in light of the budgetary exercise under way, compliance with the fiscal commitments acquired at the european and national level should be the cornerstone of our budgetary policy. fulfilment of these objectives will allow us to build on the gains in credibility already attained and to turn around the upward trend in the public debt / gdp ratio. both goals are prerequisites for a durable economic recovery. bis central bankers ’ speeches one of the main changes to the institutional framework of spanish fiscal policy has been the creation and start - up of the autoridad independiente de responsabilidad fiscal ( independent authority for fiscal responsibility – iafr ). the iafr will be playing a most prominent role throughout the budgetary cycle, monitoring compliance with the principle of budgetary stability in the general government sector, in accordance with the provisions of article 135 of our constitution and with european regulations. in this way spain is moving to enhance its economic governance, joining those eu countries – practically all of them – that have this type of agency. the iafr, adhering to the principles of independence, transparency and accountability, will contribute to improving control over fiscal policy and to introducing greater budgetary discipline in all tiers of general government, in line with the law on budgetary stability and financial sustainability approved in 2012. more specifically, and focusing on the budget for this year, the iafr has recently published a report on macroeconomic forecasts ( informe sobre las previsiones macroeconomicas ), endorsing the government ’ s macroeconomic projections that underpin the draft state budget and analysing the consistency of the projections made in previous years. furthermore, by 15 october, the iafr is to publish its report on the draft budget ( informe sobre el propio proyecto de presupuestos ), in which it will assess its suitability with a view to meeting the objectives of stability, debt and the rule that ties spending to economic growth. as regards the sustainability of public finances in the

ran for much of q2, whereby a notable increase in the decline in gdp and in employment in this period is to be expected. the latest banco de espana macroeconomic projections, published in june against a background of unusually high uncertainty, posted estimates of quarter - on - quarter declines in activity in a range between - 16 % and - 21. 8 %. and the information since available tends to confirm that the decline in economic activity in q2 as a whole will have been in this range. that said, an improving path could be seen throughout q2, in tandem with the ongoing gradual reopening of the economy. at present, then, we are witnessing an incipient recovery in the economy, which, however, is still incomplete, uncertain and uneven. the correlation of this economic activity during q2 with the intensity of the restrictions on people ’ s movement in force at each point in time was very high. thus, some indicators that measure people ’ s movements hit record lows in the first two weeks of april, with declines of around 80 % in motorway traffic and fuel consumption, and of over 90 % in the case of airport traffic. this was reflected in the high - frequency indicators of economic activity in the weeks in which the lockdown was stricter ; then, for example, we saw reductions in electricity consumption by firms and in consumer spending paid using cards of approximately 30 % and 60 %, respectively. for april as a whole, there was an unprecedented event in the time series when some variables fell practically to zero. this was the case of new car registrations and international tourist inflows, the latter variable obviously being closely related to the restrictions on personal movement. since early may, and to a greater extent in june, the progressively staggered and regionbased easing of the lockdown measures prompted a gradual recovery in the mobility indicators and, in tandem, in economic activity indicators. this was particularly so in the final stretch of the lockdown - easing process when trips between provinces in different regions and the arrival of foreign tourists from the schengen area were once again permitted. however, it is worth noting the role that voluntary limitations on movement probably continue to play. these mean that movement is still some way off full normalisation, especially as regards international movements, which are so important for a country such as spain where, as you know, the significance of tourism within the productive structure is so high. in late june, the volume of air traffic was still 65 % down