Spain 2021-2022 Scenario – An uncertain summer
- Focus: situation of Spanish SMES
- Recent economic trends
- Outline of our scenario
- Focus: the Spanish recovery plan
The worsening pandemic in late 2020 and early 2021 led to tighter restrictions on mobility and resulted in an economic decline in Spain in the first quarter of the year. GDP fell by 0.5% in Q1, after stagnating in Q4 2020. As a result of these developments, in the first quarter of 2021, Spanish GDP was 9.4% below the level reached at the end of 2019, a significantly larger gap than that observed in the Eurozone (5.1%).
Our GDP growth forecast is 5.4% in 2021. In 2022 growth is expected to be 5.5%, which would still leave Spanish GDP 1% below its 2019 levels. The crisis’ most persistent economic effects have not yet fully manifested. The effect of rising unemployment will hinder consumption throughout 2021 and 2022, which will discourage private investment. The unemployment rate looks set to rise from an average of 15.2% in 2020 to 16.7% in 2021, and would gradually decline thereafter. The Spanish recovery plan will be an important tool to mitigate the effects of unemployment and private investor uncertainty.Ticiano BRUNELLO, Economist