Spain Economic Outlook. First Quarter 2022

Summary

Growth in Spain will remain high in the 2022-2023 biennium. Pandemic control, the use of pent-up savings, accelerating NGEU funds, ECB measures and high spare capacity would offset the effects of bottlenecks and higher energy prices.

Key points

• Key points:
• Global growth will moderate, but remain relatively robust. Global GDP is estimated to grow by around 6.0% in 2021 and to expand by 4.4% in 2022 and 3.8% in 2023.
• Growth expectations in Spain for 2021 remain broadly unchanged at 5.1%. Slower than expected GDP growth in 3Q21, was probably offset by stronger than expected in 4Q21.
• Although economic activity is expected to slow down in the first half of 2022 as a result of rising contagion, GDP growth is projected to remain high at 5.5% in 2022 and 4.9% in 2023.
• The short-term bias is positive, pending on a lower impact of the pandemic on activity. Risks associated with higher inflation and the response of central banks are starting to become important.
• The execution of NGEU funds needs to be accelerated. In the medium term, the bias will depend on the reforms to be adopted.

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