Published on Monday, January 31, 2022

Spain | Recovery underway, but still incomplete

The recovery of the Spanish economy continued in the fourth quarter, with quarterly GDP growth of 2%. This was higher than for the Eurozone (0.3%), but lower than the previous quarter (2.6%) and lower than BBVA Research's own forecast (2.4%).

Key points

  • Key points:
  • With this forward step, GDP is 4% below the level of the fourth quarter of 2019. The positive surprises are the high quarterly growth of exports (6.5%) and investment in capital goods and machinery (6.1%), and the recovery of firms profits, which were severely depressed during the crisis.
  • The negative surprises, however, were the unexpected drop in private consumption (-1.2%) and, as heralded by the EPA labor survey, the sluggishness of hours worked (0.2%), the employment variable that best tracks the performance of production.
  • The overall balance of these surprises made for a slowdown that was slightly sharper than expected, albeit offset by a more “virtuous” composition of growth. The preview just published by Spain’s statistical institute, INE, will in any event be revised in a few months when new information becomes available.
  • The balance is positive (growth reached 5% for 2021 as a whole), and the economy went from strength to strength, but growth was still less than the 6.3% forecast that the consensus of private sector analysts (published by FUNCAS) had reached at the beginning of last year.

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