Spain – 2021-2023 scenario: New year, new uncertainties

Spain – 2021-2023 scenario: New year, new uncertainties
  • Summary
  • Recent economic trends
  • Outline of our scenario
  • Focus: inflation on the rise

In resume

The Spanish economy continued to rally in the third quarter of 2021. Spanish GDP growth gathered pace quarter-on-quarter to reach 2.6% (vs. 1.1% in Q2). This expansion can primarily be attributed to the positive contribution of net foreign demand and, to a lesser extent, to the contribution of domestic demand. We expect GDP growth of 1.2% in Q4, driven by persistently robust consumption. Our GDP growth forecast for full-year 2021 is 4.8%, up from our forecasts for the last fiscal year.

Spain – 2021-2023 scenario: New year, new uncertainties

Though incomplete, the information available on the actual implementation rate of the NGEU suggests that the volume of funds to be used in 2021 may be significantly lower than initially announced by the government. Of the €26.6bn in loans to be financed by the NGEU, included in the Spanish government's budget for 2021, only €9.2bn in expenditures were recorded. The expenditures that were "pushed back" to 2022 will go towards expanding investment, projected to climb 7.3% in 2022.

Ticiano BRUNELLO, Economist