Published on Monday, January 25, 2021

Spain | Much at stake on the horizon

It's difficult to talk about economic recovery right now. Health indicators continue to show a worrying deterioration. Thousands of small and medium-sized enterprises are worried about the negative effect that fear of infection and the restrictions imposed to reduce it are having on their turnover.

Key points

  • Key points:
  • BBVA Research believes that things will improve this year and that GDP could increase by 5.5% in 2021 and 7% in 2022. We have reduced the growth forecast for EMU from 5.2% to 4.1% in 2021.
  • The recent COVID-19 developments in the Eurozone and Spain have had a negative impact on recovery, affecting both foreign and domestic demand.
  • The result of the second wave of infections and the measures implemented to try to reduce them led to further slumps in particularly affected sectors such as tourism, bars and restaurants, transport and retail.
  • Once the fear of infection disappears, confidence among consumers who have retained their jobs should return, and spending will climb as herd immunity is achieved. It is therefore expected that private consumption will increase by an average of 6.5% during 2021 and 2022.
  • The recovery will be focused on goods this year, but next year we may see tourism beginning to contribute more significantly to the recovery. Overall, we expect foreign sales of goods and services to increase by 10.9% in 2021 and 13.7% in 2022.

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