MADRID – Minister of Economic Affairs, Nadia Calviño sticks with the previously predicted economic growth for this year of 6.5%. An additional 7% increase is expected by 2022, bringing Spain back to pre-coronavirus levels and therefore full economic recovery.
Calviño announced this on Tuesday after the weekly council of ministers. She underlined the economic recovery in Spain since mid-March, when all activities were restarted and the economic situation then stabilised further in the second quarter. Also, in the second quarter of this year, the economy grew by 2% compared to the previous quarter.
Calviño also called the decrease in the number of employees with a temporary unemployment scheme ERTE and the improvement in the labour market important indicators for economic recovery. And as such, the gross domestic product (GDP) this year will be back to the level of 2019.
Additionally, unemployment is forecast to remain at 15.2% this year. That is 10 percentage points lower than analysts predicted a few months ago. Furthermore, everything indicates that by July 90% of employees with an ERTE will be able to return to work. And as a result, employment is expected to return to February 2020 levels by next fall.
Positive development labour market
According to the minister, this positive development on the labour market is the best indicator of economic growth in Spain. Furthermore, the forecast is that employment will increase by 4% in 2021 and by another 2.7% in 2022. This means the unemployment rate will fall next year from the current 15.2% to 14.1%. Calviño also said that the legal minimum wage (SMI) may increase by the end of this year.
In addition to an observed capital goods investment increase, Spanish exports are also expected to increase by 10% this year. That is 0.8% more than initially forecast.
Not only is the prognosis for economic growth positive, consumer confidence is also expected to increase further. This was reflected in the increase in national tourism this month. According to the minister, various support measures for families, employees and companies have partly been able to absorb the consequences of the crisis.
Analysts, like Calviño, expect Spain’s GDP to fully recover next year and economic growth to be just as strong in 2023 as it was before the corona pandemic.