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Spain's second-quarter GDP falls less than expected, still worst decline on record

·1-min read
FILE PHOTO: The coronavirus disease (COVID-19) outbreak, in Madrid
FILE PHOTO: The coronavirus disease (COVID-19) outbreak, in Madrid

(Reuters) - The Spanish economy shrank less than previously reported in the second quarter, but the contraction was still the worst on record as the coronavirus pandemic brought the country to a halt, the national statistics office said on Wednesday.

The economy contracted by 17.8% quarter-on-quarter and 21.5% year-on-year, compared with readings of 18.5% and 22.1% in an initial estimate released in late July.

Spanish authorities imposed one of Europe's strictest lockdowns to curb the pandemic from mid-March to late June, triggering one of the deepest recessions in the region.

A 20.4% quarterly drop in household spending dragged the economy down, alongside a 22.1% drop in investment and a 33.4% decline in exports of goods and services.

Retail and hospitality collapsed with a 39.6% drop, as travel restrictions and covid fears kept tourists away.

Recent indicators have shown that the economy has partly recovered during the third quarter and should grow more than 10%, Economy Minister Nadia Calvino said last week.

Restrictions on travel have hampered the recovery of the tourism-dependent Spanish economy. August hotel-occupancy data showed tourism was still suffering, with bookings by Britons, the largest tourist group by nationality in Spain, dropping 91%.

One of the rare sectors that contributed to the economy was agriculture, growing 3.6%. Public spending grew by 0.3%.

Spain has the highest number of COVID-19 cases in Western Europe, with over 682,000 infections and nearly 31,000 deaths as of Tuesday.

(Reporting by Maria Gonçalves, Inti Landauro, Belen Carreno; writing by Inti Landauro and Ingrid Melander; editing by Larry King)