Spain | Madrid Economic Outlook 2021

The GDP of Madrid could grow by 5.1% in 2021 but with a downward bias due to the advance estimate of the Quarterly Accounts. In 2022, regional GDP could accelerate to 5.8%. If the forecasts are met, Madrid would create, on average for the year, some 200,000 new jobs between 2020 and 2022.

Key points

• Key points:
• High growth in 2021 (5.1%), but with a downward bias. Consumption acts as a support and is the main driver of strong growth, especially in services.
• Tourism is pushing less than in other regions. Progress in vaccination and the easing of restrictions are allowing the arrival of visitors, but the recovery in Madrid is taking place with a delay, especially in terms of visits by foreigners, due to the specificities of urban tourism.
• Industrial activity and investment in equipment required export growth, which does not yet appear to be very solid. High uncertainty is also affecting lower growth in residential construction investment.
• Delay in resolving bottlenecks, which may not arrive until 2022 and further increase uncertainty. The scenario is less favourable for the export of goods and investment in equipment, and poses a risk for the most energy-intensive or polluting territories. Madrid's service orientation is a relative advantage in this respect, but further progress must be made in making the changes that will lead to greater resilience.
• Growth will accelerate to 5.8%, and Madrid could return to the leading group (Spain 5.5%). Supported by the existing savings pool, consumption will remain strong. In addition, tourism will move towards normalisation. This will be particularly noticeable with foreign and urban tourism.

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