Spain’s economy, with its high reliance on services and tourism, has been hit hard by the lockdowns and travel bans imposed by the country’s socialist coalition government to fight the coronavirus pandemic. The services sector accounts for 68% of Spain’s gross domestic product (GDP) and has remained roughly at that level for the past decade. Within this sector, tourism — which traditionally represents 12% of GDP — fell to 4% in 2020. This means that more than three-quarters of last year’s decline can be attributed to the crisis in the tourism industry.
“The Spanish economy could possibly have shrunk by as much as 11% in 2020,” says Jorge Sicilia, chief economist at BBVA. “We are looking for a return to growth in 2021 of perhaps 5.5%, rising to 7.0% in 2022. The increase in GDP for the third-quarter of 2020 was above expectations, but there was a sharp decline in the last quarter of the year. We can look forward to a significant upswing in the second half of this year.”
