Coronavirus drags Spanish economy into worst contraction on record

A view shows a police cordon as a man and children wearing protective masks enter the Plaza Mayor square, after restrictions were partially lifted for children for the first time during lockdown, amid COVID-19 in Madrid, April 27, 2020. (REUTERS)

's shrunk by its biggest amount on record, 5.2%, in the first quarter of this year due to the crippling impact of the crisis, preliminary data showed on Thursday.

The National Statistics Institute's figure was the worst since the historical series began in 1970 and exceeded analysts' forecasts of a 4.4% contraction versus the previous quarter.

Spain has had one of the world's worst outbreaks with more than 24,000 COVID-19 fatalities and imposed one of the strictest lockdowns, though officials are confident the worst has passed.

The central bank predicts the tourism-dependent economy could shrink as much as 12.4% this year though it also foresees a recovery of at least 5.5% in 2021.

The government has until Thursday night to send its own forecasts for the year to the European Union (EU).

With the economy in hibernation since a March 14 , Spain had already registered another record for its economy of losing nearly 900,000 jobs in the second half of that month.

On an annual basis, Spain's economy shrank by 4.1% in the first quarter, down from a 1.8% increase in the previous three-month period, versus economists' expectations of a 3.2% contraction.

Household spending plunged 7.5% in the first quarter compared to the previous period.

Fourth quarter growth in 2019 was 0.4%.

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