MADRID: Spain plunged into recession in the second quarter after its gross domestic product tumbled by 18.5 percent due to the coronavirus pandemic, official figures showed on Friday.
In the first quarter, growth had fallen by 5.2 percent, the Institute of National Statistics said (INE). A recession is commonly defined as two consecutive quarters of a contraction in GDP.
The first of estimate by INE is broadly in line with the forecast by the Bank of Spain which had seen a contraction in the economy of between 16 and 22 percent for the period between April to June at the height of the lockdown when all non-essential activities were halted.
The restrictions imposed under the state of emergency, which began in mid-March, were only gradually lifted in May and June.
The business, transport and hotels sector were all badly hit, with a 40 percent drop compared with the first quarter.
And tourism, a pillar of the Spanish economy which accounts for 12 percent of GDP, suffered with a 60 percent drop in revenues compared the same period in 2019.
Construction fell by 24 percent compared with the first quarter and industry by 18.5 percent. Household consumption dropped by around 21 percent and business investment by 22 percent while exports fell by around a third.
The Spanish government sees the economy contracting by 9.2 percent overall in 2020 but the Bank of Spain says that figure could reach 15 percent.
Analysts at Capital Economics said they were expecting the Spanish economy to contract “by some 12 percent this year and then recover only slowly thereafter, with a return to pre-virus size years away.”
“The record plunge in Spain’s GDP of 18.5 percent is likely to have been one of the biggest falls of any euro-zone country in the second quarter, illustrating the severity of the country’s lockdown and its slow and partial recovery,” it said in a note.
“And the recent rise in virus cases is likely to hold back the recovery in tourism, strengthening our view that the Spanish economy will struggle to rebound as quickly as its neighbors.”
Spain suffered a particularly deadly outbreak of the virus, with more than 28,400 people losing their lives.
However, it will benefit considerably from the historic €750 billion rescue plan that was agreed by the European Union’s 27 member states on July 21.
Under the plan, Spain will receive €140 billion ($162 billion) of which just over half — or €73 billion — is in the form of subsidies, while the rest is in the form of loans.
According to Economy Minister Nadia Calvino, the measures taken by the government to prop up the economy — such as extending its furlough scheme, state-sponsored loans, subsidies for the self-employed — enabled Spain to avoid “a collapse in GDP of more than 25 percent.”
The pandemic also destroyed more than a million jobs in Spain in the second quarter, mostly in the services and tourism sector.
Unemployment hit 15.3 percent by the end of June and is expected to reach 19 percent by the year’s end, the government says, although the IMF sees that figure rising to as much as 20.8 percent.
Spain in recession as economy shrinks 18.5% in the second quarter
https://arab.news/8nrev
Spain in recession as economy shrinks 18.5% in the second quarter
- A recession is commonly defined as two consecutive quarters of a contraction in GDP
Saudi Arabia sets global benchmark in AI modernization
- Executives hail the Kingdom’s robust infrastructure and strategic workforce programs
RIYADH: Saudi Arabia is emerging as a global leader in artificial intelligence, according to executives from OpenText, one of the world’s largest enterprise information management companies.
With 22 years of international AI experience, Harald Adams, OpenText’s senior vice president of sales for international markets, said the Kingdom’s modernization efforts are now setting a global standard.
“From my perspective, Saudi Arabia is not only leading the modernization towards artificial intelligence in the Middle East, I think it is even not leading it only in the MENA region. I think it is leading it globally,” Adams told Arab News.
In an interview, Adams and George Schembri, vice president and general manager for the Middle East at OpenText, discussed the Kingdom’s significant investments in AI during the inauguration of OpenText’s new regional headquarters in Riyadh.
“So for us (OpenText), from our perspective, it was a strategic decision to move our MENA headquarters to Saudi Arabia because we believe that we will see here a lot of innovation coming out of the country, we can replicate not only to the MENA region, maybe even further to the global level,” Adams said.
The new headquarters, located in the King Abdullah Financial District, will serve as a central hub for OpenText customers and partners across the Middle East. Its opening reflects a broader trend of tech giants relocating to Riyadh, signaling the Kingdom’s rise as a hub for global AI innovation.
Adams attributed Saudi Arabia’s lead in AI modernization to a combination of substantial financial backing, a unified national strategy, and a remarkable pace of execution.
“I mean, a couple of things, because the ingredients in Saudi Arabia are of course, quite interesting. On the one hand side, Saudi Arabia has deep pockets and great ambitions. And they are, I mean, and they are executing fast, yeah,” he said.
“So from that perspective, at the moment, what we see is that there are, especially on the government side, I can’t see any other government organizations globally moving faster into that direction than it is happening in Saudi Arabia. Not in the region, not even on a global level, they are leading the game,” he underlined.
Schembri added, “Saudi’s AI vision is one of the most ambitious in the world, and AI on a national scale is not good without trusted, secured, and governed, and this is where OpenText helps to enable the Saudi organizations to be able to deliver on the 2030 Vision.”
“The Kingdom’s focus on AI and digital transformation creates a powerful opportunity for organizations to unlock value from their information,” Schembri stated.
“With OpenText on the ground in Riyadh, our customers gain direct access to trusted global expertise combined with local insight — enabling them to manage information securely, scale AI with confidence, and compete on a global stage,” he added.
DID YOU KNOW?
• Saudi Arabia ranks 5th globally and 1st in the region for AI growth under the 2025 Global AI Index.
• The Kingdom is also 3rd globally in advanced AI model development, trailing only the US and China.
• AI is projected to contribute $235.2 billion — or 12.4 percent — to Saudi Arabia’s GDP by 2030.
The inauguration of OpenText’s new regional headquarters was attended by Canada’s Minister of International Trade and Economic Development, Maninder Sidhu, and Jean-Philippe Linteau, Canada’s ambassador to Saudi Arabia.
Sidhu emphasized the alignment of Saudi Vision 2030 with Canada’s economic and innovation goals.
“His Highness (Crown Prince Mohammed bin Salman) and Vision 2030, there is a lot of alignment with Canada, as you know, with the economic collaboration, with his vision around mining, around education, tourism, healthcare, you look at AI and tech, there’s a lot of alignment here at OpenText Grand opening their regional headquarters,” Sidhu told Arab News.
Saudi Arabia’s AI ambitions are projected to contribute $235.2 billion — or 12.4 percent — to its GDP by 2030, according to PwC. The Saudi Data and AI Authority, established by a royal decree in 2019, drives the Kingdom’s national data and AI strategy.
One flagship initiative, Humain, chaired by Crown Prince Mohammed bin Salman, was launched in May 2025 under the Public Investment Fund. It aims to build a full AI stack — from data centers and cloud infrastructure to models and applications — positioning Saudi Arabia as a globally competitive AI hub. The project plans to establish a data center capacity of 1.8 GW by 2030 and 100 GW of AI compute capacity by 2026.
Saudi Arabia is also expanding international partnerships. In May 2025, Humain signed a $5 billion agreement with Amazon Web Services to accelerate AI adoption domestically and globally, focusing on infrastructure, services, and talent development.
The Kingdom ranked fifth globally and first in the Arab region for AI sector growth under the 2025 Global AI Index, and third worldwide in advanced AI model development, behind only the US and China, according to the Stanford University AI Index 2025.
Education is another pillar of Saudi AI strategy. Starting in the 2025-26 academic year, AI will be taught as a core subject across all public school grades, reaching roughly 6.7 million students. The curriculum will cover algorithmic thinking, data literacy, and AI ethics.
OpenText executives emphasized their commitment to supporting Vision 2030 and the national AI strategy through workforce development.
“OpenText has put a lot of investment in the Kingdom, right. We brought cloud to the Kingdom, we’ve opened our headquarters in the Kingdom, we’ve basically hiring Saudis in the Kingdom, We basically building, if you like, an ecosystem to support the Kingdom. And on top of that, what we’re doing is we’re putting a plan together, if you like, a program to look at how we can educate, if you like, the students at universities,” Schembri said.
“So this is something that we are looking into, we are basically investigating and to see how we can support the Saudi nationals when they come into the workplace. And I’m really excited. I have Harry who is, our leadership who’s supporting this program.”
“It’s something that we are putting together. It’ll take some effort. So it’s still in play because we want to make sure what we put it basically delivers on what we're trying to achieve based on the vision of Saudi,” he added.
“The younger generation is sooner or later either working for us or maybe for a partner or for maybe for a customer. So that’s why we are to 100 percent committed to enable all of that,” Adams said.
