Spain | Storm clouds and cold weather from the north affect growth

Summary

After a first half of the year in which the Spanish economy displayed a degree of momentum, the outlook for the second half is rather darker. A few months ago, we were hoping that the north winds would help to clear the skies, but they now appear to be bringing a storm with them.

Key points

• Key points:
• As expected, the return to normal after the pandemic and the recovery of employment led to an upturn in consumption among residents of Spain and those of other European countries until June, driving domestic and international tourism.
• However, the increase in these two components of demand (household spending and non-resident consumption) wasn’t as high as expected.
• As a result, the growth forecasts for this year are being revised slightly downwards in the southern and eastern communities of the mainland, as well as on the islands.
• Going forward, the situation is more complicated than anticipated. Even so, the impact isn’t uniform throughout the country.
• For example, the lower than expected impetus of the arrival of foreign visitors will reduce the GDP growth forecast in the insular communities, and, to a lesser extent, in Catalonia.

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