Published on Monday, September 11, 2023 | Updated on Monday, September 11, 2023

Spain | Reform and economic growth

Over the last decade, Spain has shown signs of a divergence in its GDP per capita with respect to the European Union. In these circumstances, it is not surprising that the Recovery, Transformation and Resilience Plan (PRTR) and European funds have generated expectations of a reversal of this trend.

Key points

  • Key points:
  • Although NGEU funds have yet to deliver the anticipated boost to private investment and economic activity, as indeed BBVA Research and AIReF have had occasion to point out, it is too early to observe any significant effects or meaningful change in the trends of the main drivers of long-term economic growth in Spain.
  • Most of the studies that have attempted to estimate the effects of such measures have relied on ex-ante evaluations of the potential impacts.
  • The Recovery, Transformation and Resilience Plan (PRTR) estimates that in 2030 Spain’s GDP will be 3.1 percentage points higher than what it would be without the plan, and that the plan will increase potential growth by 3 tenths of a percentage point.
  • For decades, Spain has endured structural weaknesses that can only be resolved through reforms to bring us closer to the most advanced societies, by increasing productivity and employment, reducing inequality and limiting the effects of aging and decarbonization on potential growth.
  • Ultimately, all these determinants of well-being depend on the quality of institutions, which should be subject to the rule of law and effective anti-corruption measures, along with capable public administrations and an efficient judicial system, among other indicators; all aspects in which Spain still has significant room for improvement.

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