Post-summer COVID news: Spain’s GDP expected to drop 11.2% as deficit will continue to grow

**This article is continuously updated with the latest developments.

Spain’s GDP is expected to drop by 11.2% this year, 2.4 points than previously estimated, according to officials.

Meanwhile, the country’s projected deficit in 2020 will be 11.3% of its GDP, an increase from the 10.3% predicted in April and higher than the one the country reached in 2012.

Unemployment, however, was predicted to reach 17.1% by the end of this year, 1.9 points less than what was forecast in April.

Partial lockdown in largest autonomous community

The regional government of the the largest Spanish autonomous community, Castilla y León, decided on 5 October to implement partial lockdowns in León and Palencia for 14 days to curb the quick surge in COVID-19 infections reported in both cities in past weeks.

The new lockdowns in León and Palencia will be similar to the extra measures already implemented in Madrid, which recorded a two-week incidence rate of 692.1 cases per 100,000 people, the largest spike in Europe during that period.

Were the situation to worsen in Madrid within the next 10 days despite the stricter measures, the president of the Castilla-La Mancha region (south), Emiliano García-Page (socialist, PSOE), told private television Antena3 in an interview yesterday that he proposes stricter measures be taken. “Madrid has a problem: it is bigger than the rest (of Spanish cities). But the problem is national”, he added.

Madrid given 48 hours to implement partial lockdown

Officials in the Spanish capital have 48 hours to introduce tighter measures on social life and implement a partial lockdown preventing residents from leaving the city limits without justification, according to new criteria approved by the Spanish government on Thursday (1 October). EURACTIV’s partner EUROEFE reports.

Madrid under partial lockdown

As of Friday 10pm, Madrid has eben under partial lockdown, meaning its residents cannot leave the city limits except for essential trips and work, for which they needed to show an official permissions if requested.

Officials in the Spanish capital were given 48 hours to introduce tighter measures on social life and implement a partial lockdown preventing residents from leaving the city limits without justification, according to a new criteria approved by the Spanish government on 1 October.

Madrid’s regional president and member of the conservative Popular Party, Isabel Díaz Ayuso, said local authorities will obey the new measures but would appeal them in court.

“This (regional) government is not in revolt, it will comply strictly with all of the orders,” Ayuso told members of the Madrid assembly on Thursday morning.

The legal challenge, she insisted, would “defend the interest of the people of Madrid.” According to her, “(the government’s) plan won’t work because it destroys Madrid for no reason.”

The new COVID-19 measures, published in the official journal on 1 October, were the fruit of negotiations between the central government and the Madrid government, which agreed to the terms as long as they apply to all cities in Spain.

Spanish Health Minister Salvador Illa asked regional representatives to vote on the matter in the inter-territorial health committee on Wednesday. While 13 of the country’s autonomous regions voted in favour of adopting the rules, Madrid, together with other regions in the hands of opposition party PP, as well as separatist-led Catalonia voted against it.

Under the new guidelines, local authorities must implement a partial lockdown if they have a coronavirus incidence rate above 500 per 100,000 inhabitants in the last 14 days, a PCR test positivity rate above 10% and more than 35% of ICU beds are taken by COVID-19 patients.

Bars and restaurants in affected areas will have to reduce their capacity and close by 11pm while shopping centers will have to cut capacity to 50% and close by 10pm. The government reversed its earlier proposal to close children’s playgrounds.

The regional Madrid government has already placed 45 health districts in a partial lockdown, a measure that has overwhelmingly affected lower-income neighborhoods in the south. The move prompted protests amid accusations of classism.

Madrid given 48 hours to implement partial lockdown

Officials in the Spanish capital have 48 hours to introduce tighter measures on social life and implement a partial lockdown preventing residents from leaving the city limits without justification, according to new criteria approved by the Spanish government on Thursday (1 October). EURACTIV’s partner EUROEFE reports.

This comes after Spain’s leftist coalition government urged local authorities in Madrid (Comunidad de Madrid, ruled by the conservative Popular Party, PP) to place the entire capital, rather than selected districts, in a form of lockdown to curb the fast spread of the COVID-19 pandemic in the Spanish capital.

Spain has reported almost 770,000 coronavirus cases since the pandemic began as of 1 October, some 230,500 of which were documented in Madrid.

On 22 September, Spanish Health Minister Salvador Illa (PSOE), and Madrid mayor José Luis Martínez-Almeida (Popular Party), recommended to limit mobility in the county’s capital “to a minimum”.

This, according to them, would work as extra preventive measures to help contain the fast spread of the second COVID-19 wave.

However, Illa told private radio station Cadena SER in an interview that it is currently not necessary to declare a “State of Alarm” in Madrid, although it would be appropriate to analyse further complementary measures to restrict mobility and social gatherings in the capital, should the situation worsen, Cadena SER reported on its website.

“I would recommend to the people of Madrid that they restrict their mobility as much as possible to what is essential these days,” he said. According to him, not only should contacts be limited to the narrowest circle possible, but information approved by  the (regional/Comunidad de Madrid) government should also be scrupulously respected”, he went on to say.

On 22 September, José Luis Martínez-Almeida had recommended that the  people of Madrid stay at home and “go out as little as possible” in view of the –he said- “worrying” situation that the city is suffering due to the fast increase in contagion.

New measures for Madrid

New measures to combat the fast spread of the pandemic in Madrid entered into force on 21 September.

The measures aim to limit social gatherings to no more than six people and putting neighbourhoods which have seen the most infections back into partial lockdown for at least 14 days with shops, bars and restaurants only being allowed to operate at 50% capacity

Madrid’s regional government (Comunidad de Madrid) on Friday announced the fresh restrictions aimed at curbing the rising number of coronavirus cases in the region. They enter into force in several southern parts of the capital, severely hit by the new outbreaks. Read more.

Thousands of residents from South Madrid’s neighbourhoods took to the streets over the weekend, protesting against the “discriminatory” nature of new coronavirus restrictions. Madrid’s regional government was  also criticised for “marginalizing” the “poor” south of Spain’s capital.

Those living in the six districts of the Spanish capital and another seven municipalities in the area – which would gather close to 1 million people – were not allowed as of Monday to leave these zones, unless they were to travel for work or other essential activities. However, those areas are home to 13% of the capital’s population and a quarter of the city’s infections.

The new measures come after several weeks of Madrid authorities reporting the highest number of new coronavirus cases in Spain, more than three times higher than other areas of the country.

And yet the recent spikes have put more pressure on the city’s precarious healthcare system, as 64% of the ICUs are occupied with COVID-19 patients.

No rapid economic recovery

Spain’s GDP shrunk 17.8% in the second quarter of the year, which is seven tenths less than previously forecast on 31 July, right after the end of the national “state of alarm” implemented by the government to contain the rapid spread of the COVID-19 pandemic, the country’s National Institute of Statistics (INE) reported on Wednesday.

On 17 September, Spain’s Central Bank (Banco de España) ruled out a rapid economic recovery, particularly for the tourism sector, which accounts for almost 15% of the country’s GDP.

While Spain’s public financial institution lowered growth forecasts for 2021 to 4.1%-7.3% in its latest report released on Wednesday, the economy’s contraction for 2020 was placed in  between 10.5 and 12. 6%, a figure that is in line with its June forecast.

Spain sees increase in hospital admissions

The number of COVID-19 hospital admissions has been increasing over recent weeks in Spain and now account for 7.5% of all patients, compared to 4% just 20 days ago, Dr. Antonio Román, a director at the Hospital Vall d’Hebron in Barcelona, told EFE.

Measuring ICU occupancy is the best way to analyse the health risk of the pandemic, says Dr Román, and the latest data from the health ministry shows that there are currently 8,658 COVID-19 patients in hospitals across the country, 1,181 of which are in ICU, EFE reported.

The Spanish health ministry confirms that, despite the rise in cases, the number of positive tests is slowing and the fatality rate remains low, contrary to the patterns observed between March and May.

“I believe there are reasons enough to think that what we lived through in March will not happen again,” Román told EFE. Back in March, 700 of the 1,000 beds in the Vall d’Hebron hospital were occupied by COVID-19 patients, while in September that figure is around 40.

However, Dr. Marc San, who works at the Hospital de la Princesa in the Spanish capital Madrid, has a less optimistic take on the situation.

In Madrid, around 19% of hospital patients were admitted for COVID-19, more than double the national average and many healthcare workers in the region fear that “we’re going back to how it was before.”

And although new doctors have been specifically hired to bolster ICUs, Dr San complained that many new doctors have been hired on so-called “COVID contracts”, which expire at the end of the year.

San has also criticised local government for having failed to draw up a contingency plan, noting that “the fact that it’s getting worse is purely a political decision.”

Primary care, which plays a vital role in detecting and containing coronavirus cases, is also suffering a shortage of staff, though this varies from region to region.

“Primary care is worse than what it was in February, before the first wave began,” said Dr Javier Padilla, a GP in Madrid who used to handle around 40 appointments a day, but is now dealing with about 70.

More than half a million COVID-19 cases

Spain became the first EU country to confirm more than half a million COVID-19 cases since the start of the pandemic, putting it in ninth place globally, behind Mexico and South Africa, EFE reported.

The country passed the grisly milestone of over half a million registered coronavirus cases as health authorities added 26,500 to the national tally over the weekend, bringing it to 525,549.

Many of the cases were backlogged from the previous week but 2,440 of them were detected in the last 24 hours. Read more here.

Tourism takes a hit

International tourism to Spain collapsed in the first two months of a summer season blighted by travel restrictions and a gradual rebound in COVID-19 cases following the end of a strict lockdown.

Between June and July there were 16 million fewer foreign visitors to Spain and a negative balance of €19 billion in tourist spending compared to the same period in 2019, according to the latest figures from the Spanish national statistics institute (INE), according to EURACTIV’s partner EFE.

Call for unity

Spain’s socialist PM Pedro Sánchez asked on Monday all opposition parties to show “unity”, as the key tool to overcome the COVID-19 crisis. “It is time for agreements” not to fight each other, he warned.

There is no space now for “partisan” struggles, it is time to work hard to achieve a sound  economic recovery. “If Spain wants, Spain can”, he stressed in a speech before a group of CEO’s of Spain’s top companies in Madrid.

The sooner political parties reach a wide consensus “the faster the recovery will be”, Sánchez stressed.

Sánchez is set to meet the heads of the country’s main opposition forces in parliament this week.

The Spanish PM will meet the leader of the conservative Partido Popular (PP), Pablo Casado, on Wednesday this week. The same day, Sánchez plans to meet with the leader of centrist-liberal Ciudadanos (Citizens), Inés Arrimadas.

→ Read more on the measures taken before summer break here:

New COVID-19 spike forces Barcelona to go back into lockdown

The EURACTIV Network provides you with the latest news on how the country is dealing with the coronavirus health crisis.

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