Bank of Spain Says Country's GDP Can Drop Over 13% Following Coronavirus

The bank has laid out various reference macroeconomic scenarios for the Spanish economy in the aftermath of COVID-19.

The optimistic scenario envisages eight weeks of lockdown, provided that government measures for curbing the spread of infection succeed in adverting the mass closures of businesses and unemployment — in this case, the GDP will likely fall some 6.6 percent and the economic recovery will begin immediately after the lockdown is over, the bank said.

The pessimistic scenario, conversely, is calculated based on 12 weeks of quarantine with ensuing mass closures of businesses. The economy will likely shrink by 13.6 percent in this scenario and recovery will not begin until the year-end, according to the publication.

There is a middle ground scenario as well, envisaging eight weeks of quarantine and a partial closure of businesses. The bank expects GDP to fall 8.7 percent in this scenario and the economic recovery to begin in the fourth quarter of the year.

Despite a slight slowdown in the spread of infection over the past several days, Spain remains the world's third-worst affected country after the United States and Italy. To date, the Spanish health authorities have reported over 200,210 cumulative COVID-19 cases, including 20,852 fatalities and 80,587 recoveries.

The country has been on lockdown since 14 March.

The Spanish government has already allotted close to 200 billion euros ($217 billion) toward tackling the epidemic's economic impact, including such measures as zero interest rate micro-loans and a guaranteed supply of electricity, water and gas throughout the next six months even in default of payment.