MADRID – Thanks to the above-expected national tourism this summer and the sharply increased demand for products and services, analysts at BBVA Research have been able to positively adjust the forecast for the economic recovery in Spain.
Furthermore, the research firm expects a growth of 6.5% in gross domestic product (GDP) this year. This is compared to 5.5% published in April. However, the expectation for 2022 has remained the same at 7%. Consequently, that would mean the 10.8% loss of GDP suffered in 2020 will be more than recovered next year.
Compared to the latest forecast from April, the new forecast is more positive for all autonomous regions in Spain. With the exception of the Balearic Islands, all regions, GDP will be back to 2019 levels next year. Despite the fact that the largest economic recovery (in percentages) in all of Spain was registered here, the economic contraction of 23.7% suffered in 2020 will not yet have been compensated in 2022.
Favourable prognosis also due to arrival of EU money
Apart from increased consumption, analysts attribute the positive recovery to a favourable international environment. The approval of the Spanish Recovery Plan, the arrival of the financial resources from theNextGeneration EU fund, and the impulse measures of theEuropean Central Bank (ECB) also contributed.
According to BBVA Research, economic growth this year is strongest in the Balearic Islands (8.3%). This is followed by the Canary Islands (6.9%), Cantabria (6.8%), Galicia (6.8%), Valencia (6.7%), and Andalucia (6.7%). However, the economies of the regions of La Rioja (5.6%), Extremadura (5.7%), Navarra (5.9%), Castile and León (5.9%) and Castile-La Mancha (5.9%) grew the least this year.
Furthermore, the Balearic Islands are expected to experience the highest growth in 2022 (11.6%). This is followed by the Canary Islands (10.7%), the Basque Country (7.5%), and Navarra (7.3%). Whereas, the lowest economic growth is expected in Asturias (5.8%), Cantabria (5.8%), Castile and León (6.1%), and Castile-La Mancha (6.1%).
BBVA Research’s optimistic forecast is based on a favourable epidemiological development in the coming months. And also the arrival of the money from the European emergency fund. The latter in particular is crucial for the expected economic recovery in Spain.