Spain's GDP Drop in 2020 Worst in 50 Years

Spain's gross domestic product (GDP) fell by 10.8 per cent in 2020, the worst since 1970, amid the global Covid-19 pandemic, according to official data,

The data issued by the Spanish Statistical Office (INE) on Friday revealed the decline was the result of an important reduction in internal demand (consumer spending and investments) which was responsible for an 8.8 per cent drop in GDP with the remaining 2 per cent due to a fall in external demand.

It is the first annual fall in Spain's GDP since a 1.4 per cent drop in 2013 and the worst annual contraction experienced by the country's economy since records began to be kept in the current format in 1970.

The previous worst year for the Spanish economy was 2009 when the GDP fell by 3.8 per cent at the height of the economic crisis.

The INE also revised its original calculation for the fourth quarter of 2020, changing the original estimate of 0.4 per cent growth for the period from October to December to zero growth.

The International Monetary Fund (IMF) predicted last October that Spain will suffer most among developed countries from the economic impact of the pandemic, with a 12.8 per cent fall in its GDP in 2020.

The INE also reported a 31.6 per cent year-on-year fall in the number of mortgages signed for purchasing houses or flats in Spain in January.