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Date Published: 22/09/2021
ARCHIVED - Spain expected to lead the economic recovery in the EU
The government of Spain believes that the economy could reach pre-pandemic levels by the end of 2022
Following a disastrous financial year globally in 2020 in the midst of the coronavirus pandemic, the latest projections prepared by the central government, the Bank of Spain and the Organisation for Economic Cooperation and Development (OECD) show that Spain is recovering strongly and is in fact expected to be the European economy with the most growth over the next two years.
The OECD forecasts that the Spanish economy will increase by 6.8% in 2021 and 6.6% in 2022, while the more conservative Bank of Spain puts the GDP rebound figures at 6.3% and 5.9%. While all of the national and international organisations agree that Spain should soon recover to its pre-pandemic level, they differ on which of the next two years will be the more prosperous.
The Bank of Spain believes that the "moderating" effect of inflation added to the return to normal spending for households will mitigate growth somewhat in 2022, while the Ministry of Economic Affairs and Digital Transformation has suggested that next year, the greatest effects of the recovery plan will be felt.
Regarding the unemployment rate, the bank estimates that 2021 will close with an unemployment rate of 15.1% - 10% less than what the government predicts - and that 2022 will do so with a rate of 14.3% - 20% more than the Spanish government. Both agree on inflation, which has already reached its highest level in nine years.
The main difference in the two estimates lies in how they have calculated the impact of consumption on the economic recovery of the country, with the government predicting that general consumer demand will have rebounded by 8% at the end of 2021 and that it will lose some steam in 2022 with a rise of just 6.9%. On the other hand, the Bank of Spain has attributed a 9.6% increase in consumption to 2021 and reduces growth to 4.3% in 2022.
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