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Spending rose 8% in May in provinces which reached Phase 2,a
more advanced stage of Spain's four-part de-escalation plan. In
some provinces, spending rose 16%. By comparison, total
bank-card transactions in shops fell 60% in April year-on-year.
Spending on food, domestic appliances, health, books and media
drove the increase. Leisure and travel showed no signs of
revival as the two industries were all but paralysed.
The easing of restrictions also hurt online spending, which only
represented 15% of total consumption, versus 18% in the same
period last year.
Consumer spending in areas that remained in Phase 1 did not
improve, contracting by roughly 10% in the final week of May,
BBVA said.
Spain has suffered one of the world's worst coronavirus
outbreaks, with 27,133 deaths and 240,660 confirmed cases so
far. The economy, which relies heavily on tourism and
hospitality, contracted 5.2% in the first quarter.
If Spain's economy shrinks by 13.5% in 2020 -- the most
pessimistic projection -- the risk of insolvency for Spain's
businesses could triple, and in the worst-affected sectors even
multiply by a factor of eight, McKinsey's Global Institute said
on Friday.
Small and medium companies account for a larger part of Spanish
economy than the European Union average -- 47% of Spain's
workforce is employed in companies with fewer than 20 employees
-- and are especially vulnerable to economic crises, McKinsey
added.
(Reporting by Clara-Laeila Laudette; additional reporting by
Belen Carreno; editing by Inti Landauro, Larry King)
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