Spain | The recovery of Spanish economy in the wake of the pandemic

Although we are still managing the health crisis with its continuous trickle of infections and deaths, the approval of vaccines against COVID-19 and their expected deployment over the coming months is an important ray of hope for our societies.

Key points

• Key points:
• After a cumulative GDP decline of 22.1% in the first half of 2021, the Spanish economy bounced back with a 16.5% growth in the third quarter, according to the advance estimate issued by the Spanish National Statistics Institute, although this figure may be subject to significant revisions.
• The most recent figures for the fourth quarter show mixed signals. On the positive side, employment registers in the Social Security, consumer and business confidence, and other indicators make it possible to predict quarterly GDP growth slightly below 1%, with a decelerating trend that could continue in late December.
• However, the PMIs are retreating again. Although far from the freefall observed in spring, their levels are similar to those of the sovereign debt crisis in 2011 and 2012, when the quarterly decline in GDP was between five-tenths and one point.
• GDP in the 4th quarter of 2020 would be approximately 9% lower than at the end of 2019. However, the loss in terms of social welfare this year will be far greater.
• Given the favourable external conditions expected in 2021, the intensity and duration of the Spanish recovery will depend on the future we choose and on the success of the policies implemented to achieve it.

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