Storm Filomena To Blame For First Quarter Economic Contraction

The latest figures released by the National Statistics Institute (INE) show a contraction of 0.5% in the Spanish economy for the first quarter of 2021.

The results are slightly worse than had been forecast and worse than the zero growth for the last quarter of 2020.

The figures reflect the continuing fallout from the pandemic as well as the Storm Filomena which brought the country to a standstill in January.

The storm brought widespread distruption to businesses throughout the peninsular, with Madrid particularly hard hit.

However, on a year-on-year basis, GDP declined in the first quarter at a much slower pace than it did in the fourth quarter of 2020. Specifically, the Spanish economy contracted by 4.3% year-on-year, compared with a fall of 8.9% in the previous quarter.

Indeed Spain’s economy ranked favourably with other EU countries which as a whole recorded a 0.6% fall in economic output – pulled down by Germany´s fall of 1.7% for the first quarter.

Compared to the same period last year , Spain´s GDP fell by 3.3% year-on-year, 4.9 points lower than in the fourth quarter of last year.

Investment, for its part, also returned to negative values in the first quarter after two quarters of increases. Specifically, investment contracted by 1.9% between January and March. This compares with growth of 1% in the previous quarter and the historic increase of 21.5% in the third quarter of 2020.

The same was true of exports and imports, which showed negative rates of 0.1% and 1.3% up to March, after recording gains of 4.6% and 6.2% in the last quarter of 2020.



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