During the COVID-19 pandemic, Spain has been one of the hardest hit countries in Europe with over 1,400,000 reported cases. In addition to this, the country, which is heavily reliant on the tourism industry, has experienced a serious economic downturn.
Despite earlier plans to ease the lockdown measures, Spanish officials have had to introduce new restrictions to prevent more deaths. And, the EU has warned that this could lead to further economic difficulties as it’s predicted GDP could fall by 12.4% by the end of the year.
According to the European Commission’s autumn forecast, Spain will continue to be one of the most affected countries in the pandemic. It has predicted that this won’t begin to improve until next year, with a 5.4% reduction, but could bounce back the following year with 4.8% growth.
In July, the country was highlighted as one of the worst performers economically, second only to Italy. However, the current figures are worse than expected. Officials had predicted the economy would grow by 7.1% next year, which is now looking unlikely.
The Spanish government’s figures have been slightly more optimistic, with a predicted recovery next year. Many individuals and businesses are, of course, hoping this is the case, as a severe recession could be on the cards otherwise.
Debt is another key concern for the Commission. Last year, the figures showed the budget deficit would reach -10.1% this year. But, after the pandemic, it’s predicted that debt will increase to 115.6%, although it will begin to fall next year if the forecasts are accurate.
There are fears this could worsen the economic slowdown across Europe. The second wave of the virus has already started to make an impact. Plus, if the UK fails to make a trade deal for next year, there could be more economic turbulence.
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