THE Bank of Spain has estimated that the economy will shrink by 15% due to the coronavirus crisis.
Since yesterday however economists have increased this to 15.1%, with the projection being part of a series of alternative scenarios, which looked at the possibility of an early recovery, a gradual recovery and a more adverse scenario fueled by new COVID-19 outbreaks.
In every scenario, the economic impact Spain will suffer is larger than the Eurozone average.
This is due to two main reasons, the fact that the Spanish economy is heavily reliant on tourism and that the lockdown in Spain was stricter and longer than in other countries.
The Bank of Spain estimates that the economy’s rebound next year will be 6.9%.
In the best case scenario, complete economic recovery would not take place until 2022, with some pessimists even thinking it would be 2023.
According to El Pais sources: “The fall is going to be very big, and it is quite likely that in 2022 we won’t even have gone back to pre-crisis levels. It’s going to take us some time.”
The public debt in Spain is expected to soar to anywhere between 114% and 119% of GDP this year, then go slightly down to between 112% and 116% in 2021.
The prediction is that it will be years before debt goes back to what it was at the end of 2019, when it was at 95%, a figure that seemed really high at the time, but now seems small.