Spain’s economy may dive 12.4% this year amid coronavirus lockdown uncertainty

The economy of Spain could contract between 6.8 percent and 12.4 percent in 2020 if the Covid-19 lockdown lasts eight or 12 weeks, the Bank of Spain said on Monday.

According to the central bank, which charted various economic scenarios, the disruption suffered by the Spanish economy was, as in the case of other countries, of “considerable severity.” The regulator added that there was still great uncertainty. 

“The results of the different scenarios point to reductions in Spanish GDP in 2020 unprecedented in recent history,” it said.

In any case, an upturn is expected to begin in the second half of the year, leading to a “remarkable recovery” in 2021, with a projected growth of between 5.5 percent and 8.5 percent.

The International Monetary Fund (IMF) last week predicted that Spain is facing an economic crisis even deeper than the one it experienced in 2008 in the wake of the global financial crisis.

The IMF has warned the country’s unemployment rate could climb to 20.8 percent in the wake of the coronavirus lockdown.

The Spanish government said on Monday that 399 people died of Covid-19 over the past 24 hours which is the lowest daily number of deaths in the country in four weeks.

“Today for the first time we've fallen under 400 deaths, although it's only a little lower (than Sunday), these figures give us hope,” said Fernando Simon, the health ministry's emergencies coordinator. “These are very encouraging figures,” he added.

Spain is the second-worst hit nation by the pandemic after the US, with more than 200,000 infected and over 20,000 deaths.

The country’s health authorities believe the epidemic peaked on April 2 when 950 people died over 24 hours, nearly three weeks after the government imposed a strict lockdown. On Saturday, the government said it would extend the lockdown until May 9.

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