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Spain’s GDP contracted 0.5% in the first quarter

The Gross Domestic Product (GDP) of Spain contracted 0.5% in the first quarter of 2021, marked by a tightening of sanitary restrictions and an unusual wave of cold and snow, according to the provisional official estimate published this Friday.

The government forecasts a strong revival of economic activity in 2021, with a growth forecast of 6.5% of GDP after having plunged 10.8% in 2020, one of the biggest drops among developed countries.

This rebound was slowed down by the restrictions decreed since October 2020 to put an end to the successive waves of the pandemic: in the last quarter of last year it registered zero growth and in the first of 2021 a loss of 0.5%, according to the National Institute of Statistics (INE).

In year-on-year terms, the GDP of the fourth economy in the euro zone fell by 4.3% compared to the first quarter of the previous year.

Between January and February, the Spanish economy was hampered by new restrictions imposed to fight against the outbreak of infections detected after the Christmas holidays, which particularly affected sectors such as tourism and restaurants.

In addition, the country was hit by storm Filomena, an unusual cold and snowy storm that paralyzed Madrid and important areas of the country for ten days in January.

This less dynamic than expected first quarter led the government to lower its growth forecast for 2021 from 7.2% to 6.5% year-on-year.

This forecast is similar to that of the International Monetary Fund (IMF), which foresees a 6.4% growth of the Spanish economy in 2021, the strongest rise among developed countries together with the United States.

By 2022, the Spanish government of Pedro Sánchez predicts a growth of 7%.

These economic turbulences impacted on the fragile Spanish labor market, which ended 2020 with more than half a million additional unemployed, particularly in tourism and catering.

At the end of March, unemployment reached 15.9% of the workforce, a rate that does not take into account the 740,000 people still included in the partial unemployment plans enabled and financed by the government to avoid massive layoffs due to the pandemic. .

emi / dbh / mar

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