Spain's GDP plummets by 5.2% in first quarter of 2020

Spain's GDP plummeted by 5.2% in the first quarter of 2020 compared to three months before.

According to figures released by Spain's statistics institute (INE) on Thursday, the quarterly drop was of 4.1% on last year.

The impact on Covid-19 in the economy begins to be felt, and the figures only show data until end of March – the state of alarm began on March 14 and is still ongoing. 

This is the biggest GDP decrease at least since 1970, the first year INE records for this variable are available.

Indeed, the drop in the first three months of 2020 is significantly more dramatic than any single quarter of the years after the 2008 financial crisis – the heaviest fall during that period was the first quarter of 2009, when Spain's GDP was 2.6% less than three months before.

Yet, in the first and second terms of 2009, the year-to-year GDP fall was of 4.2% and 4.3% respectively, slightly bigger than the current 4.1%.

On Friday, the Spanish cabinet released its latest estimations for the whole of 2020: its GDP is expected to plummet by 9% and the unemployment, from the current 14% to 19%. 

Larger GDP drop for Catalan economy

The figures for Catalonia have not yet been released, but the Catalan government estimates that GDP will fall 8.8% this year in the worst-case scenario, with the unemployment rate skyrocketing from 10% to 18%. 

The country's vice president, Pere Aragonès, announced the estimations on Thursday, shortly after the GDP drop in Spain was known. 

Even the less pessimistic estimates suggest that this year the Catalan economy will shrink by at least 7.6% and the unemployment rate go up to 17%.

However, the government also predicts a strong recovery next year, with GDP rising somewhere between 5.1% and 6.5%, with the jobless rate between 14.2% and 15.9%.