Since 1970, when these data started to be recorded by the National Statistics Institute (INE) of Spain, it is the first time that such low values have been observed. The year that came closest to the current year was 2009, marked by the previous financial crisis, when the economy fell 2.6 percent – half of the values now registered.
In order to find a collapse in economic activity in the neighboring country similar to the current one, it would have to go back to the years after the civil war of the last century, according to statistics from historians consulted by the The country.
Between January and March this year, household consumption contracted 6.6 percent, investment 5.5 percent and the foreign sector suffered a historic blow due to the closure of borders. Spending was higher, especially due to support for the economy to prevent bankruptcy of companies and further redundancies.
In the first three months of the year, public expenditure increased 1.8 percent, the highest level in 12 years. In terms of spending on families and non-profit institutions alone, the increase was 0.8 percent – five tenths more than in the same period last year.
The sectors that recorded the least losses were agriculture and health. The most affected were trade, transport and hotels, with falls of more than ten percent. Construction, despite returning to activity before other sectors, also fell by 6.8 percent. In the three quarters preceding this one, in 2019, the Spanish economy had registered increases in the order of 0.4 percent.
In terms of working hours, employment fell five percent in the first quarter. However, at the level of full-time jobs, the fall was 1.9 percent.
The Spanish INE clarified that the situation caused by the pandemic makes some variables, including hours of work, more relevant when calculating the evolution of employment during those months. “This variable, when compared to the equivalent full-time jobs, is the one that most clearly reflects the effects of Covid-19 on employment,” explained the entity, cited by El Pais.
After the discouraging data for the first quarter of this year in Spain is known, now it remains to wait for the results of the second quarter, which is about to end. It is expected that the numbers will be even worse, as it was during this period that unemployment fell sharply and that the economy stopped completely due to the high number of cases of infection with the new coronavirus.
In order for the country to officially enter a crisis, experts demand two consecutive periods of three months with negative numbers, so it will only be some time after all the figures have been analyzed, that it will be confirmed whether the state of the situation is as serious as is thought. So far, the most reliable estimates for this quarter are those of the Bank of Spain, which estimates that the economy has fallen 20 percent.
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