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ECONOMY

Pandemic lockdown sees Spanish factories post worst slump since 2009

Spanish industrial output fell by more than nine percent last year, its biggest plunge since 2009, owing to the coronavirus pandemic and a strict lockdown, official figures showed Monday.

Pandemic lockdown sees Spanish factories post worst slump since 2009
Photo: AFP

Data published by the National Institute of Statistics (INE) showed that output collapsed by 9.4 percent in 2020.

In 2009, Spanish factory output plunged by 15.6 percent.     

The latest figures nonetheless also showed a slight upturn at the year's end, with December posting a 1.1-percent increase from the previous month owing to a pick up in energy production.

“The health crisis caused by Covid-19 caused different industrial sectors to suffer acutely from the pandemic in 2020 with significant reductions in production, especially in March, April, May and June,” INE said in reference to the months under lockdown.   

The biggest slump was recorded in consumer goods and business equipment, while perishable consumer goods and energy were the least affected.   

As the country emerged from the lockdown in June, factory output picked up even although the recovery was staggered in different sectors, with a noticeable rise in consumer durables and business equipment.

Intermediate goods that are used in manufacturing have also done well, and in fact exceeded output levels posted in 2019.   

Spain's economy contracted sharply by 11 percent in 2020, one of the eurozone's worst results, with its key tourism sector battered by the pandemic.    

The annual output figure was largely in line with the government's forecast, while the International Monetary Fund had expected a sharper contraction of 12.8 percent.

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ECONOMY

Spain’s middle-class youngsters the most likely to end up poor across all EU

Spain leads the ranking of EU countries with the highest risk of young people ending up in poverty as adults, despite coming from families without economic difficulties.

Spain is the fourth EU country with the highest inherited poverty
Spain is EU country with most middle-class young people who end up poor. Photo: Jaime ALEKOS / AFP

Spain is also the fourth EU country with the highest rate of inherited poverty risk, according to Eurostat, the EU Statistical Office.

Data on intergenerational poverty indicates that there is a correlation between the financial situation of the household you grew up in and the risk of being poor when you reach adulthood and in Spain, there is a strong link. 

The latest statistics available from 2019 show that the at-risk-of-poverty rate for the EU was 23 percent among adults aged 25 to 59 who grew up in a poor financial situation at home when they were 14 years old. This is 9.6 percentage points more than those who come from families without financial problems (13.4 percent). 

READ ALSO: Spain’s inflation soars to 29-year high

How the situation in Spain compares with the EU

Spain has become the EU country with the highest risk of poverty among adults who grew up in families with a good financial situation  – 16.6 percent.

This was followed by Latvia with 16 percent and Italy with 15.9 percent.

That statistics also show the countries where it is less likely to be poor after growing up in households without economic difficulties. These include the Czech Republic (5.9 percent), Slovakia (7.9 percent) and Finland (8.5 percent).

The overall poverty rate in the EU decreased by 0.1 percentage points between 2011 (13.5 percent) and 2019 (13.4 percent), but the largest increases were seen in Denmark (1.9 points more), Portugal (1.8 points), the Netherlands (1.7 points) and Spain (1.2 points).  

On the other hand, the biggest decreases in the poverty rate were seen in Croatia (-4 percent), Lithuania (-3.6 percent), Slovakia (-3.5 percent) and Ireland (-3.2 percent).

READ ALSO: Spain’s government feels heat as economic recovery lags

Inherited poverty

The stats revealed that Spain was also the fourth country with the highest rate of inherited poverty risk (30 percent), only behind Bulgaria (40.1 percent), Romania (32.7 percent) and Italy (30.7 percent).

This means that children of poor parents in Spain are also likely to be poor in adulthood. 

The countries with the lowest rate of inherited poverty risk were the Czech Republic (10.2 percent), Denmark (10.3 percent) and Finland (10.5 percent).

The average risk-of-poverty rate for the EU increased by 2.5 percentage points between 2011 (20.5 percent) and 2019 (23 percent), with the largest increases seen in Bulgaria (6 points more), Slovakia and Romania (4.3 points), Italy (4.2 points) and Spain (4.1 points).

The biggest drops were seen in Latvia (-8.5 points), Estonia (-8.0 points) and Croatia (-2.3 points). 

The largest gaps in people at risk of poverty when they reach adulthood were in Bulgaria (27.6 percentage points more among those who belong to families with a poor economic situation as teenagers compared to those who grew up in wealthy households), Romania (17.1), Italy (14.8), Greece (13.5) and Spain (13.4).

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