Crisis Looming as Brussels Predicts a Further 10.9% Decrease in Spain’s Economy

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Image of Charles Michel, President of the European Council. Credit: European Union

BRUSSELS has released its latest economic forecasts for EU member states, and the situation is looking dire for Spain. According to these forecasts, the Spanish GDBP is expected to fall by 10.9 per cent and by 2022 it will only partially recover with a growth of 7.1 per cent.

The unprecedented impact of the crisis and the suspension of activity during the first half of the year has ultimately brought these figures down for Spain, especially so as the country is heavily reliant on the services sector.

This new 10.9 per cent drop is 1.5 points lower than what Brussels had calculated in May. The European Commission calculates that the ‘new normality,’ along with the keeping of social distancing measures and changes in consumer behaviour, will cause a ‘lasting impact’ in activities where personal interaction is necessary, such as food, hospitality, retail, personal services, culture and entertainment.

Furthermore, the reduction of flight activity will have an added impact on international tourism, no matter how many borders reopen. Out of the entire eurozone, Spain’s is the second worst economy that will suffer a deep recession, falling only behind Italy who is expecting an 11.2 per cent drop in its economy. France has placed third with a 10.6 per cent drop. These are much below the euro area average which has been calculated at around 8.7 per cent. Germany has withstood strongly albeit with a 6.3 per cent drop.

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Written by

Laura Taylor

Laura Taylor is a graduate from the University of Leeds. At university, she obtained a Bachelors in Communication and Media, as well as a Masters in International Relations.
She is half British and half Spanish and resides in Malaga. Her focus when writing news typically encompasses national Spanish news and local news from the Costa del Sol.

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