Today: Wednesday, 17 April 2024 year

Spain’s economy suffers record 5.2 percent lockdown slump

Spain’s economy suffers record 5.2 percent lockdown slump

Spain’s ministry of the economy reported the worst ever indicator, the national statistics agency INE reports. As data illustrates, the drop is the worst the EU country has experienced since the 1930s.

Coronacrisis has a great impact on the economies of the EU countries, including Spain. The country has many industrial and agricultural business along with its powerful touristic sector. All of these fields suffered significantly because of the lockdown.

In fact, Spain’s economy contracted dramatically in the first quarter of the year because of the coronavirus lockdown, with GDP dropping by 5.2 percent between January and March.

The kingdom remains the eurozone’s fourth-biggest economy but it had not experienced such a serious decline since the Great Depression, according to the INE figures. For comparison, during the financial crisis GDP dropped by 2.6 percent in the first quarter of 2009.

According to the financial experts, several factors contributed to the drop, including

  • a 7.5 percent fall in household consumption,
  • a 3.5 percent decrease in business investment and
  • a 9.6 percent fall in the housing market.

Spain has a plan on how to revamp its economy soon

Minister for Transport José Luis Ábalos said the government had anticipated a large economic impact and had pushed for a national pact to revamp the economy.

“The plan to ease the lockdown has also to do with this situation, to prevent a bigger economic fall,” he told Cadena SER radio.

Amid the coronacrisis and the nationwide lockdown, the annual Consumer Price Index hit -0.7 percent in April, due to the fall in the price of fuel. However, annual food prices went up from 2.5 percent in March to 4 percent in April, INE report says.

This week, Spain’s PM has unveiled the plan on the gradual lifting of restrictions. A few parts of the country where the novel pathogen data are more promising will jump directly to phase one, in which adults will be able to go for a drink on a bar’s terrace. However, they will still be banned from entering other people’s homes. Travel within one’s own province will be possible, said the PM’s official statement.