In a latest report by Bank of Spain, it’s estimated that the country’s GDP could contract from -6.8% to -12.4% this year due to coronavirus pandemic. But vigorous rebound is expected in 2021. Unemployment could also surge to 18.3% to 21.7%.
In the best scenario, lockdown that started in mid-March would only last eight weeks. GDP would contract -6.8% in 2020 before growing 5.5% in 2021. Unemployment would still hit 18.3% in 2020, before falling back to 17.5% in 2021.
In the central scenario where companies’ liquidity shortages turn into solvency problems in the eight-week lockdown, GDP would contract -9.5% in 2020 before rebounding by 6.1% in 2021. Unemployment rate will surge to 20.6% this year then dropped back to 19.1% next.
In the worst case scenario which lockdown lasts 12 weeks, GDP would contract -12.4% in 2021 then rebound 8.5% in 2021. Unemployment rate could hit 21.7% before easing to 19.9% next year.