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Published on Wednesday, August 18, 2021

Spain | The recovery in consumption marks the difference in regional growth

The data we have up to the middle of the summer shows the Spanish economy is growing faster than was forecast a few months ago. The recovery in household expenditure—and in particular the increase in domestic tourism—has improved the outlook, with stronger revisions for the Mediterranean coast.

Key points

  • Key points:
  • The Balearic Islands (+8.3%) and the Canary Islands (+6.9%) are currently still the regions which will have the biggest growth in 2021; this is in part due to the heavier falls in output they suffered last year and comes despite their greater dependence on foreign tourists.
  • Domestic consumption is driving the economies of other regions: Andalusia and the Community of Valencia (+6.7%), and Catalonia and Murcia (+6.6%), will grow faster than Spain as a whole — benefiting from the domestic tourist boom. This will also be the case for Cantabria and Galicia (+6.8%) and Aragon (+6.6%).
  • In other autonomous communities, it is investment, industrial activity and exports of goods that are supporting the boost given by household expenditure. As a result, the upward revision of forecasts for Castilla-La Mancha (+5.9%) and Extremadura (+5.7%) is also higher than for the country as a whole.
  • Spain's GDP growth forecast for 2022 remains at 7%. International tourism remains the key to achieving double-digit GDP growth in the Balearic Islands (+11.6%) and the Canary Islands (+10.7%).
  • The strong recovery in investment in 2021 (underpinned in part by the funding businesses have received as a result of the pandemic) may see some capex activities being brought forward.

Documents to download

  • Press article (PDF)

    PepRuiz_La_recuperacion_del_consumo_marca_las_diferencias_en_el_crecimiento_regional_Invertia_ElEspanol_WB.pdf Spanish August 18, 2021

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