MADRID (Reuters) – Spain’s economy has started to recover after the severe impact of the coronavirus pandemic, Economy Minister Nadia Calvino said on Wednesday, citing favourable employment indicators following the gradual easing of a lockdown since May.
She said 1 million furloughed workers were working again and 300,000 new workers had registered with social security.
“The recovery phase has already started,” she told parliament, adding that the trend change was backed by various indicators, mainly the latest job creation data.
While the Spanish economy is heading for the worst contraction on record in 2020, of up to 11.6%, the Bank of Spain forecast the recovery would start in the second half of this year, with GDP likely to bounce back and grow by 7.7% to 9.1% next year.
It expected the economy to bottom out in the second quarter with a slump of around 22%, but recovery in the tourist-dependent country should be a little stronger than the euro zone average.
Early indicators, such as Spanish services and factory PMIs, showed businesses partly resumed activity in May after plunging in April.
Spain is emerging from a three-month lockdown after the virus caused one of the world’s heaviest death tolls.
(Reporting by Inti Landauro, editing by Andrei Khalip and Giles Elgood)