Central Bank of Spain Expected Contraction

Central Bank of Spain Expected Contraction

The Spanish Central Bank said in a statement to the press that the Spanish economy could contract. The Central Bank of Spain, on the country's economy; estimates contraction of up to 15 percent, if the worst scenario occurs. If this scenario will occur, the contraction will be one of the biggest economic contractions the Euro Zone has seen. The fact that Spain is the country most affected by the coronavirus epidemic and its dependence on tourism worsens things. Spain, which is the fourth largest economy in the Euro Zone, is in shock as it faces an unprecedented crisis. In addition, the major part of the Spanish economy consists of small businesses; Spain is having a hard time due to employers generally hiring temporary workers and heavy employment.

Central Bank Predicts Unemployment Can Rise

The Central Bank of Spain stated that the unemployment level, which was 14 percent before the pandemic was experienced; This year he talks about the possibility of rising from 18.1 to 23.6 percent. Even in the best case, the unemployment rate is expected to remain above 17 percent by the end of 2022. On the other hand, Spanish Central Bank chief economist Oscar Arce stated that after the sharp decline, a stronger recovery will probably be experienced compared to other Euro Area partners. Even in the worst case scenario, the expectation that the Spanish economy will grow by 7 percent in 2021 has been quoted.