WHILST analyst and government economists expected that Spain would suffer serious economic problems in the first half of 2020, many have been surprised at the size of the drop in Gross Domestic Product (GDP).
The Spanish National Statistics Institute (INE) has released information showing that the actual fall in the second quarter of the year was 18.5 per cent, much greater than the forecast 16.6 per cent which was in itself worrying.
When you consider the incredible way in which the Spanish economy had grown for 24 consecutive quarters and was approaching its situation prior to the 2008 economic crisis, this is not good news.
Looking forward and taking into account the first two quarters results, the end of 2020 sees a 22 per cent drop and Spain is entering into the deepest recession it has known.
There was some hope of a tourist recovery when Britain opened the ‘safe corridor’ but the imposition shortly after of the need to self-quarantine when returning to the UK from Spain has seriously affected the situation.
Certainly, holidaymakers and second home owners from other parts of Europe are visiting the country but the British do represent the largest percentage of visitors and therefore any recovery will be marred by the non-appearance.
One area of good news is that whilst acknowledging that 2020 will have to be something of a write off economically, the Spanish Government will receive grants from the European Union and believes that 2021 will see the return to economic growth.