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Published on Friday, July 1, 2022

Spain | La Rioja Economic Outlook 2022

La Rioja's GDP grew by 4.4% in 2021. But the war in Ukraine and sanctions reduce growth expectations. Thus, Rioja's GDP is expected to grow by 3.4% in 2022 and 3.0% in 2023. By the end of 2023, GDP per capita could be 1% higher than in 2019.

Key points

  • Key points:
  • GDP growth in 2021 was boosted by the recovery in tourism, household and business spending and the impact of public policies.
  • Activity is expected to pick up strongly in these two years, but the consequences of the invasion of Ukraine will weigh on the recovery and pose a higher risk to the outlook. However, the impact on activity in La Rioja through bilateral relations is less than in other regions, while the effect through energy costs is similar to that expected for Spain as a whole.
  • Bottlenecks, demand problems in Europe, and the costs of energy and intermediate products prevent the expected and necessary recovery of the industrial sector, which is key for La Rioja, and the difficulties in European demand reduce the prospects for exports of products such as wine. The NGEU funds, whose spending was initially focused on boosting rural tourism in La Rioja, will be key to improving the digital skills of the population and opening up new possibilities for anchoring the population.
  • The economy of La Rioja has already recovered pre-crisis employment levels, while the unemployment rate will fall to 9.1% in 2023, reaching levels similar to those of 2008. Moreover, by the end of next year, GDP per capita could be 0.9% above pre-crisis levels.
  • Public policies will be key to minimising the effects of the war. The fall in electricity prices will be significant. In the absence of an income pact, the uneven impact of inflation may increase social unrest. Uncertainty persists about investment linked to the NGEU and spending could leak into higher imports in the face of supply constraints.

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