MADRID (Reuters) – The economic impact from the coronavirus pandemic will last longer than initially expected and the Spanish economy could experience a significant deterioration in the second quarter, Bank of Spain governor Pablo Hernandez de Cos said on Monday.
“What has been confirmed in the last few weeks is that the recovery will not be without difficulties, and, besides, more unfavourable scenarios cannot be ruled out,” De Cos said in the Spanish parliament.
In the first three months of the year, Spain’s economy shrunk by 5.2%, its biggest amount on record.
The Bank of Spain had said in April that the Spanish economy could contract by 6.8% to 12.4% in 2020. De Cos said on Monday that a smaller range of 9.5%-12.4% now seemed to be the most realistic scenario.
However, De Cos also said he expected the Spanish economy to bounce back in 2021 and grow between 6.1% and 8.5%.
One of the worst-hit nations with 27,650 deaths and 231,350 infections, Spain is now slowly starting to ease a strict lockdown in place since mid-March.
(Reporting by Jesús Aguado and Emma Pinedo; editing by Ingrid Melander)