The Spanish economy was just turning the page on the debt crisis. The country even recorded growth of 2% in 2019, well above the euro area average. But the scale of the health crisis linked to the coronavirus pandemic should plunge the country back into recession. The extent of this recession will depend on the duration of the containment measures, according to Georges Dib, economist at Euler Hermes. In the worst case scenario, GDP could even fall by 6% this year.

In this context, Spain could see unemployment increase rapidly, and business failures multiply. This situation is explained in particular by the great dependence of the Spanish economy on tourism, which represents 15% of the GDP and 13% of the jobs in the country. However, the recovery of this sector depends not only on the situation in Spain, but also on the lifting of containment measures in the rest of the world.

To deal with these numerous economic risks, the fourth economy in the euro zone has planned a support plan for households and businesses. But its direct impact on public finances remains difficult to assess at this stage, according to Georges Dib. Everything will depend, among other things, on the number of Spaniards who will benefit from the partial unemployment measures.

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