Spain’s Q2 unemployment rate due to be released
Spain is expected to announce a second quarter unemployment rate of 17% today, up from 14% last quarter.
Although the Q1 unemployment rate showed only a moderate increase from an 11-year low in late 2019, many analysts believe that the official rate—conducted by household polling in March—underestimated the economic impact of COVID-19. Data from April documented a record 5.2 million recipients of unemployment benefits, nearly 30% of Spain’s working population.
Spain’s historically high unemployment can be traced to the relatively large bloc of temporary workers in seasonal industries—like tourism and hospitality—who typically bear the brunt of recession-based layoffs. Tourism alone makes up around 14% of Spain’s GDP, compared to 12% in Italy and 8% in Germany.
Consequently, a steep decline in tourism this (northern) summer will significantly affect Spain’s seasonal employment. While Spain lifted travel restrictions for EU and Schengen countries in June, a spike in COVID-19 cases last week forced the UK government to shut down its existing travel corridor with Spain. On Friday, the French government advised against travelling to Catalonia, spurring the cancellation of 20% of the region’s hotel reservations.
While travel restrictions will likely re-loosen as Spanish cases recede, the nation’s volatile seasonal economy is unlikely to recover this year. Unemployment could reach 20% by 2021 and will likely not fall below 15% until at least next summer at the earliest.
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