Spanish and Italian economies hit hard by COVID crisis

In the second quarter, the Spanish economy was hit hard by the coronacrisis and the severe lock-down measures against the virus outbreak. According to preliminary figures from the Spanish Statistical Office, the economy shrank by 18.5 percent compared to the first quarter.

The contraction was more pronounced than expected, because economists had predicted a decline of 16.6 per cent on average. In the first quarter of this year, the Spanish economy was already shrinking by 5.2%.

On an annual basis, Spain’s economy fell by more than 22%. Spain is one of the countries hardest hit by the coronavirus. The crisis, for example, almost completely shut down tourism to Spain, but also the business community and consumer spending were under heavy pressure.

Rather, the country’s economy was showing a steady recovery from the financial crisis. The Spanish government has forecast an economic contraction of more than 9% by 2020. By 2021, there should be a growth rate of almost 7%.

Italy’s economy declined by 12.4% in the second quarter compared with the previous three months. That blow was caused by the coronacrisis and the strict lock-down measures against the virus outbreak. This was announced by the Italian statistical office Istat in a provisional estimate. The shrinkage is less strong than feared.

Economists, on average, expected a 15.5 percent fall. In the first quarter of this year the Italian economy was shrinking by 5.4%. This, in turn, was a more marked decrease than previously calculated, when the Statistical Office reported an economic contraction of 5.3 per cent.