ANDALUCIA could see its economy shrink by 16.2% this year due to the coronavirus pandemic.
That’s the worst case scenario forecast in the 20th Loyola Economic Outlook Report, created by Loyola University with help from the Andalucian Confederation of Entrepreneurs (CEA).
Such a drop would occur following a second wave of COVID-19 and yet another period of lockdown.
In the best case scenario, assuming the de-escalation plan is successful and there is no lethal second wave in the autumn or winter, the region is still expected to see its GDP fall by 10.3%, before recovering by 7.4% in 2021, if the so-called V-shape model rings true.
The report emphasises that it is impossible to tell which scenario is more likely, given that experts have not been able to rule out the destruction or severe damage done to production methods or a second wave of the virus.
Likewise, the best case also depends on the recovery of the tourism sector from July 1, but it is still not known how successful that will be and whether or not the vital British market can be recovered sufficiently.
Tourism figures plummet
It comes as the National Institute of Statistics (INE) confirmed today that foreign visitors to Andalucia and Spain fell year-on-year by 100% in April.
Unsurprisingly, the flow of international tourists stopped in mid-March, when the state of alarm was announced and borders were closed.
It means there were no foreign tourists in April and crucially, no money spent.
National tourism was also all but destroyed, with huge events such as the Semana Santa in Sevilla and the Fallas in Valencia cancelled.
March, meanwhile, which had two weeks of foreign tourism, saw a 64.1% year-on-year drop in visitors.
Even the first three months were tough for the region, seeing 1,534,151 foreign tourists, 25% less than the same period last year.
It meant their spending also dropped by 20.5% over the same three months, although they still brought €1.67 billion to the regional economy.
But tourism won’t be the only drag on the finances this year, with household consumption across the country expected to fall by more than 10%, in the best case scenario, before recovering by 7.3% next year.
Meanwhile, exports will fall by 25%, and imports by up to 30%, according to the study.
Unemployment will also increase by up to 10%, and stagnate at around 20.9%, the best case model predicts.
In 2021, employment is expected to rebound by 6.8%.
In Andalucia, unemployment could see an increase of up to 10.8%, bringing it to a high of 29.5%, before dropping to 25.4% in 2021.