Spain marks month in lockdown as recession warnings grow

(Update 1: Adds detail throughout, changes lede, headline, offers new angles)

By Jake Threadgould

Madrid, Apr 14 (efe-epa).- Spain’s one-month lockdown milestone was met with foreboding news of an economic recession from the International Monetary Fund but authorities insisted the urgent focus remained on saving lives.

Thousands of employees, mainly those in construction, manufacturing or other roles that don’t allow for remote working, returned to work Tuesday after the government tentatively lifted a two-week period of economic suspension designed to stymie the overwhelming impact of the Covid-19 pandemic on Intensive Care Units (ICUs).

Some light was cast on the possible financial side-effects of keeping the majority of the country’s 47 million people housebound from 14 March until at least 26 April as well putting the economy to “hibernate” for two weeks when the IMF predicted Spain’s economy to contract by 8 percent this year.

In its half-yearly World Economic Outlook report released on Tuesday, the IMF also forecast the number of unemployed in Spain would hit 20.8 percent as it warned the world economy could see a global recession this year akin to the Great Depression and “much worse than during the 2008–09 financial crisis.”

The report said Spain’s economy would rebound and grow by 4 percent in 2021 if the pandemic subsided by the second half of this year.

Pedro Sánchez’s Socialist Party-led government is acutely aware of the looming task of guiding the country out of the economic recession expected as a result of the strict confinement measures.

Having strongly urged the European Union to help share the burden of debt of dealing with the crisis, he had turned his focus to sealing a national pact with other party leaders.

His government spokesperson, María Jesús Montero, said it was too early to tell the real economic impact the coronavirus pandemic will have in Spain.

“These are preliminary figures,” she said of the IMF’s report at a daily press briefing. “We have to wait a few more weeks.”

“Right now the priority is still to save lives and minimize the damage to our production capabilities,” she added.

She announced a government initiative to let small and medium businesses and the self-employed who earn less than 600,000 euros a year to delay their tax returns in April for a month. The measure would affect roughly 3.4 million Spanish taxpayers.

Montero added that 940,000 people had turned to the state welfare system to access the benefit system set up to help those temporarily laid-off or who have been handed a temporary pay cut. Last month Spain said around 900,000 jobs were lost because of the virus.

Salvador Illa, the health minister, on Tuesday said the curve of new infections was flattening but that the country should keep the confinement measures in place.

Spain’s health ministry earlier said 567 coronavirus-patients had died in the last 24 hours, an increase on the 517 detected in the same period on Monday. A total of 18,056 people have died overall.

Some 3,045 new infections were also reported between Monday and Tuesday, bringing the total since the outbreak began to just above 172,500 since the outbreak began, roughly 87,000 of which are active.

Fernando Simón, the head of Spain’s public health emergency department said the figures could be prone to a margin of error given the Easter holiday period over the weekend, adding that although the daily trend in new infections had started to slow, the rate was still high at around 3,000 every 24 hours.

In a bid to get a better picture of the full extent of the Covid-19 crisis in Spain, one of the worst hotspots globally, the government has issued a decree allowing regional authorities to take control of any diagnostic clinic, public or private, that was not already providing data to the national public health system.

The move also aims to regulate the price private clinics were setting for tests, specifically rapid-testing kits.