Spain | Navarre Economic Outlook 2022

Navarre's GDP grew by 4.8% in 2021. But the war in Ukraine and sanctions reduce growth expectations. Thus, Navarre's GDP is expected to increase by 3.5% in 2022 and to slow down in 2023, when the increase will be 0.2%.

Key points

• Key points:
• GDP growth in 2021 (4.8%) was driven by the recovery of tourism, household and business spending and the impact of public policies.
• The first half of 2022 was characterised by buoyant employment and consumption but 3Q22 data point to stagnating activity.
• Bottlenecks, demand problems in Europe, and the costs of energy and intermediate products delay the necessary recovery of the industrial sector, which is key for Navarre, until 2023, and the difficulties in European demand reduce the prospects for capital goods exports. But as bottlenecks are resolved, exports of goods are expected to pick up by the middle of next year.
• By the end of 2023, Navarre's GDP per capita could be only 1 pp below the pre-crisis level. The economy of Navarre has already recovered pre-crisis employment levels, while the unemployment rate will fall to 9.1% in 2023, to levels similar to those of 2008. Moreover, by the end of the following year, GDP per capita could exceed pre-crisis levels by 0.9%.
• The NGEU funds, the lower risk of energy shortages or the competitiveness of industry may allow the brake on industrial activity to be less than in other European regions with a similar degree of specialisation. In any case, public policies will be key to minimising the effects of the war.

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