Spain's crippling economy to contract 9.2% in 2020, warns Spanish government

Spain'sEconomy Minister Nadia Calvino reported that country's economy is expected to see a huge dip in the current year.

Country's Gross Domestic Product (GDP) might contract 9.2 per cent in the year of pandemic. She further explained that the unemployment will increase to 19 per cent in the country. She said the crippling condition of the economy is due to thepandemic.

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In a press conference, she explained that the Bank of Spain expected "asymmetric V-shape recovery, with the deepest decrease in the second quarter and then a strong and gradual recovery in the second half of the year," she said. "Forecasts are prudent and consistent."

She assured people that GDP is expected to recover in 2021 and expand 6.8 per cent. Before the pandemic hit the country, Calvino has forecasted a growth if 1.6 per cent in country's GDP. The government has also forecasted 2020 deficit forecast to 10.34 per cent and a 2020 debt to GDP ratio at 115.5 per cent now.

"This is the widest deficit since 2012 when Spain reached 10.7%," explained Budget Minister Maria Jesus Montero.

In its forecasts to the European Commission, the government sees GDP moving from two percent growth in 2019 to a 9.2 percent drop this year, while unemployment would jump to 19 percent from 13.8 percent at the end of 2019, Economy Minister Nadia Calvino told a press conference.

Spain was one of the worst-hit countries with more 24,000 positive coronavirus cases. However, the country has seen some relief in the cases now, and is expecting to ease the strict lockdown more in the coming weeks.

(With inputs from agencies)