MADRID (Reuters) – The Spanish economy has been growing at a rate of more than 10% so far in the third quarter after a record drop in the preceding quarter due to the impact of the coronavirus pandemic, Economy Minister Nadia Calvino said on Monday.

The Spanish economy was one of the worst-hit by the pandemic and subsequent lockdowns in Europe, posting an 18.5% contraction in April-June from the previous quarter as non-essential activities ground to a halt for most of the period. It had contracted 5.2% in the first quarter.

“With all the precaution and prudence, we can expect growth of more than 10% in the third quarter of the year,” Calvino told a financial event held in the northern city of Santander.

The growth estimate from Calvino, who also said the labour market was rebounding, is slightly more conservative than that by fiscal watchdog AIReF, which last week upgraded its third quarter GDP expansion forecast to 15.2%.

To repair the ravaged economy, the Spanish government is counting on the 140 billion euros (125.23 billion pounds) it is due to receive from the European Union’s recovery fund, about half of which will be in non-repayable grants.

“A plan that, according to government estimates, will lift up our country’s economic growth by more than two percentage points in the long run,” Prime Minister Pedro Sanchez told a conference in Madrid.

The Spanish central bank has said the economy could contract by 9%-11.6% in 2020, without ruling out an even sharper contraction of 15.1% due to the possibility of a new wave of coronavirus.

(Reporting by Jesús Aguado, Emma Pinedo, Belen Carreño and Inti Landauro; editing by Andrei Khalip and Mark Heinrich)

FILE PHOTO: Spain’s Deputy Prime Minister and Economic Affairs Minister Nadia Calvino attends a European Union finance ministers meeting in Brussels, Belgium January 21, 2020. REUTERS/Johanna Geron