Spain | Aragon Economic Outlook 2022

Aragon's GDP grew by 4.2% in 2021. The sanctions imposed on Russia and the increase in fuel prices reduce growth expectations. Even so, Aragon's GDP could increase by 2.9% in 2022 and 3.0% in 2023. By the end of 2023, GDP per capita could exceed the pre-crisis level by 1%.

Key points

• Key points:
• GDP growth in 2021 was boosted by the recovery in tourism, spending by Aragonese households and companies and the impact of public policies, both from the central and regional governments.
• Although the increase in activity will continue to be high in these two years, the consequences of the invasion of Ukraine will weigh on the recovery. The risk of impact through bilateral relations is lower than in other Autonomous Regions. The increase in the price of imported products is higher for Aragon than for other Autonomous Regions.
• Bottlenecks, demand problems in Europe, and the costs of energy and intermediate products prevent the expected and necessary recovery of the industrial sector, which is key for Aragon. The NGEU funds, whose spending is mainly focused on green transition in Aragon, will be key to opening and strengthening alternative market niches to the automobile.
• Aragon's economy has already recovered pre-crisis employment levels, while the unemployment rate will fall from 8.3% in 2023 to levels similar to those of 2008. Moreover, GDP per capita will only recover to pre-crisis levels by the end of next year.
• Public policies will be key to minimising the effects of the war. The fall in electricity prices will be significant. In the absence of an incomes pact, the uneven impact of inflation may increase social unrest. Uncertainty persists about investment linked to the NGEU and spending could leak into higher imports in the face of supply constraints.

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