MADRID – The Spanish Chamber of Commerce is less positive about the expected economic growth of this and the coming year. The economic recovery that has started in Spain since the vaccination campaign has turned out to be less prosperous than previously thought.
Where the expected growth rate for 2021 was previously 5.9%, it has now been adjusted to 4.7%. Furthermore, the 6.2% expected growth for 2022 has been reduced to 5.5%. According to the Chamber of Commerce, this sharp reduction can be attributed to the scarcity and price increase of raw materials. In addition, the money from the European fund ‘Next Generation EU‘ will be released less quickly than originally planned.
Looking at domestic demand, the largest decrease can be seen in gross investment in tangible fixed assets (investment in means of production). These are expected to increase by only 3.3% this year and not by the previously forecast 7.1%. In construction in particular, this growth forecast is lower, with a decrease of 2.8% versus a previously expected increase of 4%.
Export market growth indicates stable internationalisation
Foreign demand is strongly influenced by the supply problems of goods, semi-finished products and raw materials. As a result, the growth of exports, but also of imports, is lower than originally expected. Nevertheless, export growth this year is still set at 12.6 percent and at another 11.6 percent in 2022. For imports, these percentages are 10.7 and 9.7 percent respectively. The Chamber of Commerce therefore sees Spanish exports as an important player for economic growth in Spain. Moreover, this prediction testifies to a consolidated internationalization of the Spanish business community.
Reforms essential for inflation
According to the House, the price index will increase by 2.7% this year (annual average) and another 2.6% in 2022. That is almost double the 1.4% previously forecast for the coming year. To compensate for this inflation, structural reforms of the Spanish economy are necessary, which can be achieved with the European Facility for Recovery and Resilience.
1.6 million new jobs
Nevertheless, there is also positive news, because despite the slowdown in the expected economic recovery, the Chamber of Commerce is more optimistic about the recovery in the labour market. The forecast for the unemployment rate is now 15.3% for this year and 14.4% for next year. In 2021 and 2022, 1.6 million jobs are expected to be created in Spain.