Spain | A patchwork recovery

Summary

Leaving aside divergences in the short term, a comprehensive, balanced approach must pay attention to all the underlying information on the ongoing recovery of the Spanish economy that indicators such as GDP and employment can offer us.

Key points

• Key points:
• While some statistics are above their pre-pandemic levels—social security registrations, credit card purchases and daily sales of companies included in the “Immediate Supply of Information” system of the Spanish revenue agency— other indicators, such as GDP and some of its main components, e.g., private consumption and investment, are still below pre-pandemic levels.
• A recent BBVA Research paper suggests that the crisis has affected employment and activity in economic sectors, regions, aggregate demand components and income in widely different ways.
• Spain’s statistical institute, INE, has stated since the onset of the pandemic—and the subsequent lockdowns—that the effects on employment are best reflected by hours actually worked, as they are more closely correlated with the performance of GDP.
• The gap between GDP and hours worked (i.e., in productivity) was already the widest among European countries, but it is not statistically significant given the heterogeneity among these countries. The differences are even wider between the different productive sectors of the Spanish economy.
• Like many other statistics, GDP has room for improvement through availability of more and better data and faster release times. New technologies and large real-time databases have provided better estimates of the economic effects of COVID than we would have had a decade or two ago.

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