After experiencing the strongest economic contraction in the European Union, Spain is set to make its biggest comeback.
The European Commission on Thursday released its Winter forecast 2021, bringing Spain’s gross domestic product (GDP) growth outlook for this year to 5.6%, three tenths of a point higher than expected.
Because the recession in 2020 has not been as deep as expected, and thanks to breakthroughs in vaccines, we now expect the EU economy to return to its pre-crisis GDP level as early as 2022.
European Commissioner for the Economy Paolo Gentiloni
For 2022, the European executive forecasts GDP growth of 5.3%, against 4.8% previously. These figures put Spain at the head of economic growth in Europe.
Despite this, Brussels estimates that by the end of 2022 Spain will still not have recovered to its pre-pandemic GDP levels. He also warned that the country was facing an increase in business bankruptcies as government support measures were phased out.
The European Commission forecast is lower than the Spanish government’s estimate of 7.2% growth, although Brussels notes that it has not taken into account the impact of the European stimulus fund, which will offer to Spain up to 140 billion euros in grants and loans. Madrid estimates that this financial boost will add 2.1% to the growth rate.
The Brussels report shows some optimism – with many caveats – after Germany and Spain ended 2020 in a better position than expected.
“While the short-term outlook looks weaker than expected last fall, European economic growth is expected to pick up this spring and accelerate in the summer, as advances in vaccinations allow a gradual thaw in activity economic, âthe report reads. , even as he warns of the possibility of a resurgence of infections that would once again delay recovery.
The Commission has said that GDP growth in the EU will be 3.7% in 2021 and 3.9% in 2022. For the euro area, it forecasts the same growth rate of 3.8% for both years.
“Because the recession in 2020 has not been as deep as expected, and thanks to breakthroughs in vaccines, we now expect the EU economy to return to its pre-crisis GDP level already in 2022 “, said Economic Commissioner Paolo Gentiloni at the press conference. to present the forecast.
Tourism: a slow recovery
The report notes, however, that the recovery will not be the same from one country to another. âThe recovery is expected to be uneven across member states. This mainly reflects the differences in the structure of each economy and the relative importance of tourism and leisure activities, âsaid Gentiloni. This is the case in Spain, where tourism is one of the main contributors to the GDP. The industry has strongly felt the impact of the coronavirus crisis, which reduced the number of visitors to a trickle last year.
The report speaks of a “smooth recovery” of tourism in Spain this year, while “in 2022, the recovery of tourism is expected to accelerate, with most of the barriers to activity being fully removed”.
Exports, investment and domestic demand are also expected to pick up as restrictions are gradually lifted. But the study warns of the risk of an increase in company bankruptcies as political support measures are also removed, “mainly concentrated in the sectors most affected by the activity restrictions”.
english version by Susana Urra.