SPAIN’S tourism-dependent economy could experience a harsher and longer hit from COVID-19 than initially expected, the Bank of Spain governor said Monday, warning of tough times ahead for one of the world’s worst-affected nations.

Pablo Hernandez de Cos, who also sits on the European Central Bank’s governing council, said the Spanish economy was heading for a significant second quarter deterioration after shrinking a record 5.2 percent in the first.

“The length of the shock is likely to be longer than we initially anticipated, and the longer it lasts the more likely it is to cause persistent damage to the economy,” De Cos told parliament.

The Bank of Spain had said in April the economy could contract 6.8-12.4 percent in 2020. But De Cos said a smaller range of 9.5 to 12.4 percent now seemed probable. However, the economy should bounce back in 2021 and grow between 6.1 to 8.5 percent, he added.

Spain was particularly vulnerable to the coronavirus pandemic, he said, as social distancing measures had a bigger impact on the tourism, hospitality, transport and retail sectors, which account for 25 percent of GDP.

The governor called for an extension of temporary liquidity measures to support companies in these worst-affected sectors.

(SD-Agencies)