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Published on Wednesday, September 29, 2021 | Updated on Thursday, September 30, 2021

Spain| Castile and Leon Economic Outlook 2021

GDP in Castile and Leon could increase by 5.9% in 2021, and by 6.1% in 2022. This would result in the creation of some 25,000 jobs compared to 2020. There is a downward bias on these forecasts if Spain's slower economic recovery is confirmed.

Key points

  • Key points:
  • The fall in GDP in Castile and Leon in 2020 is estimated at 9.8%, 1 percentage point lower, in absolute terms, than in Spain as a whole (-10.8%). The contraction in activity in the region is mainly explained by the impact of the measures necessary to contain the pandemic on both internal and external demand.
  • Despite starting 2021 with a fall in activity (Brexit, oil, outbreaks of the pandemic), growth returned in the second quarter, and in the third quarter a high level of dynamism can already be observed. The end of the state of alarm, the progress in vaccination and the easing of restrictions, among others, have allowed private consumption growth, mainly in services, to be brought forward.
  • The upturn in European markets has had an impact on the improvement of exports of goods from Castile and Leon, especially in the automotive sector, although they are still subject to high risks.
  • In 2022, the economy could maintain its growth momentum. Greater control of the disease, the use of household savings, the approval of the Recovery Plan, the arrival of NGEU funds, the ECB's stimulus measures and a high productive capacity will allow a historically strong growth rate to be maintained, but other regions, more favoured by the normalisation of tourism, may experience higher growth.
  • The regions need to be quick, efficient and transparent in the management of the growing resources at their disposal in the coming years: the increase in revenues from the recovery, the REACT-EU and the capital injections for companies depend on their good management, as well as the implementation of part of the reforms linked to the recovery plan.

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