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Spain posts record GDP slump in 2020, hopes for 2021 in balance

29 January 2021 19:44 (UTC +04:00)

Spain’s pandemic-hit economy recorded its steepest contraction on record in 2020, and increasingly tough COVID-19 restrictions imposed since the turn of the year suggest that expectations of a strong rebound in 2021 may have to be scaled back, APA reports citing Reuters.

Gross domestic product fell 11% last year, data from the National Statistics Institute (INE) showed on Friday, as revenues in the crucial tourism sector plummeted.

That was more than the economy shrank over the five years during and after the global financial crisis that began in 2008, and historians said it marked the steepest drop since Spain’s 1936-39 civil war.

There was a modest recovery in the final three months, when higher spending boosted GDP 0.4% from the previous quarter, outstripping the 1.5% drop expected by analysts polled by Reuters.

But since then a third wave of contagion has been spreading across Europe and, like many of its neighbours, Spain has tightened curbs on movement, imposing regional curfews and restricting business hours.

The government’s projects a 7.2% GDP rebound this year, above forecasts from markets analysts who last week cut their consensus to 6.3% from 6.5%.

The International Monetary Fund has trimmed its prediction to 5.9%, and warned that the euro zone’s recovery is slipping behind those of other advanced economies including the United States and Japan.