Published on Thursday, February 10, 2022 | Updated on Tuesday, March 1, 2022

Spain | Basque Country Economic Outlook 2022

GDP in the Basque Country will accelerate in 2022 to 5.3%. In 2023, GDP growth could moderate to 4.5%. If the forecasts are met, 56,000 jobs would be created between 2020 and 2023. In the short term, the bias on forecasts may be upwards if a lesser impact of the pandemic on activity is confirmed.

Key points

  • Key points:
  • Solid growth in 2021 (4.7%), although below that observed in Spain (5.0%). Improved exports of goods, industrial activity, tourism and consumption drove the recovery.
  • Consumption, tourism and public investment have shown a weaker performance than in Spain as a whole, only partially offset by the momentum of the residential market.
  • The recovery in equipment investment, goods exports and industrial activity is subdued, affected by uncertainties, supply-side problems, international trade bottlenecks and energy and commodity prices.
  • Control of the pandemic, the use of households' pent-up savings, a boost in the execution of NGEU funds and high spare productive capacity would offset the effects of bottlenecks and higher energy prices.
  • The near-term bias may be to the upside if a lower impact of the pandemic on activity is confirmed. Risks associated with higher inflation, the response of central banks and geopolitics are starting to become important. In addition, the implementation of NGEU-related funds needs to be accelerated. In the medium term, the bias will depend on the reforms to be adopted in the coming months.

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