NGEU latest publications
BBVA Research’s forecasts point to GDP growth of 6.5% this year and 7% in 2022. This is due to the impulse from private expenditure in 2021 and to the acceleration of public spending in 2022, thanks to the roll out of resources related to NGEU.
Spain’s GDP growth estimate for 2021 is revised upwards up to 6.5%. Moving forward, the stronger progress of global activity, accumulated excess savings, the end of health restrictions and accommodative monetary and fiscal policies will boost GDP up to 7.0% in 2022.
The plan is sufficient and ambitious, it contains a proper diagnosis and assigns funds in line with NGEU objectives. It also has omissions and weaknesses. The vagueness about reforms is a particular cause for concern.
The digitization of the economy is an essential ingredient for sustainable growth and social welfare. A good digital transformation plan requires a diagnosis of the starting point. The Digitalization Index (DiGiX) is a tool that allows such a diagnosis for the Spanish regions.
Andalusia's GDP may have fallen by 11.0% in 2020 and is expected to increase by 5.4% in 2021 and 7.0% in 2022. Consumption, investment and exports will boost the economy throughout 2021. With risks, the momentum of European funds will be more noticeable towards 2022.
The pandemic has led to several historical comparisons, such as the 1918 influenza and the Roaring Twenties that followed. Another clear comparison is the massive Next Generation EU (NGEU) fiscal stimulus set to be launched in Europe, which resembles the Marshall Plan passed following World War II, but for the modern age.
Using simple calculations based on the figures published in the 2021–2024 Updated Stability Program (SP), it is clear that, with the assumptions contained in the SP, we will need a very ambitious roadmap to change certain long-term trends in public accounts.
The public deficit forecasts contained in the 2021–2024 Updated Stability Program provided by the Spanish government to the European Commission have recently been disclosed. For 2021, the collective target deficit for the Public Administrations is 8.4% of GDP, which will progressively decrease to reach 3.2% in 2024.