Spain's economy is facing enormous upheaval due to the lockdown measures implemented to halt the spread of COVID-19. The country is unlikely to recover in the nearest future. Economists fear that it may take more than one year for Spain to get back on track. Notably, Spain is one of the EU countries whose economy has suffered the most because of the virus. Therefore, Spain's GDP is projected to contract by more than 15% this year, logging one of the steepest falls in Europe. Spain's economy could shrink by a record 21.8% in the second quarter, posting its biggest drop in the last half-century.
There are a lot of reasons for such a severe contraction. The country's economy is too dependent on the tourism industry. However, this sector has incurred serious losses due to the pandemic. Besides, the start of the tourist season has been postponed. Without tourists and a strong tourism industry, the economy will remain in a tailspin for a long time. Moreover, small business also plays a key role in the economy. Despite the financial support from the government, employers of many small enterprises are not able to pay salaries to their workers and it is sure to result in massive layoffs. Perhaps the pace of economic recovery will speed up when the quarantine restrictions and a mandatory two-week quarantine observation for tourists are fully lifted. Nevertheless, the economy is unlikely to spread its wings until next year.