Spain trims GDP forecast for 2021 as Covid restrictions and record snownall hit economy

Spain trims GDP forecast for 2021 as Covid restrictions and record snownall hit economy
People clear the snow in a street in Madrid on January 14, 2021 after Storm Filomena brought the heaviest snowfall in the region for 50 years. Photo: GABRIEL BOUYS/AFP
The Spanish government lowered its growth forecast for 2021 on Friday after fresh pandemic restrictions led to a weaker-than-expected first quarter.

It now expects the Spanish economy, the eurozone’s fourth largest, to grow by 6.5 percent this year, down from the 7.2 percent forecast in October.

“The recovery … slowed in the first quarter and was lower than what we expected,” Economy Minister Nadia Calvino told a news conference.

“We expect growth to speed up in the second half of 2021,” she added.

Spain suffered a third wave of Covid-19 infections during the first two months of the year which led to tighter curbs on social life.

And in early January much of the centre of the country including Madrid were hit by a massive snowstorm which paralysed the economy for days.

The downward revision puts the government’s forecasts more in line with those of other bodies.

The Bank of Spain last month lowered its 2021 growth forecast to 6.0 percent from 6.8 percent while the International Monetary Fund expects a 6.4 percent expansion.

The government expects the economy will expand by 7.0 percent in 2022.

Spain’s economy contracted sharply by 10.8 percent in 2020, one of the worst performers in the eurozone, with its key tourism sector battered by the pandemic travel restrictions.


Member comments

Become a Member to leave a comment.Or login here.