The International Monetary Fund’s latest report on the economic consequences of the coronavirus global pandemic shows Spain as the worst performing major economy as well as the worst in Europe with a record breaking contraction.
The World Economic Outlook report entitled “A Long And Difficult Ascent” published this week by the IMF forecasts that the Spanish economy will contract by 12.8% this year which would also be the worst figures in it’s post Civil War period.
The IMF report predicts that the euro zone is expected to contract by an average 8.3%, whilst that of the United States by only 4.3%.
Although with the qualification that “the uncertainty surrounding the baseline projection is unusually large” the figures are terrible for Spain already whose own bank has warned of “difficulties” for the economy to recover its pre-Covid position until as late as 2023 and havinf long term effects on the Spanish employment market already one of the worst in Europe.
The unemployment rate in Spain in 2020 is expected 16.8% and with the end of the ERTE furlough scheme in Jannuary 2021 it could then increase significantly.
Both the IMF and the Bank of Spain have acknowledged despite the steep decline in 2020 the Spanish economy is expected to grow faster than other European countries with a rate of between 7 and 8.8% in 2021 and the recent European Rescue Fund agreement could push the growth higher.