NGEU latest publications
The rise in infections over the past month and increased costs throughout most of the past year herald a weakening of the recovery in Spain at the beginning of 2022.
Growth in Spain will remain high in the 2022-2023 biennium. Pandemic control, the use of pent-up savings, accelerating NGEU funds, ECB measures and high spare capacity would offset the effects of bottlenecks and higher energy prices.
The new labor reform was achieved with a social consensus. It clears up uncertainties, makes several improvements and avoids going back on key progress made in the last decade. But it is not ambitious enough to solve the structural problems of the Spanish labor market.
Though 2022 should be a better year for GDP growth in the Spanish economy than 2021, the current outlook is also far more uncertain than it was a year ago, due to the appearance of new risks and an increase in existing ones — making forecasts even more volatile.
The best reasons to assume that the recovery in Spain will continue over the next few months are the high vaccination rate and the wealth accumulated by certain households during the crisis. Both factors will enable household expenditure to continue to rise, as it has in the last six months.
Spain's growth expectations for 2021 and 2022 are moderated to 5.2% and 5.5%, respectively. These figures are weighed down by a number of negative factors such as disruptions in production chains, rising energy prices and delays in the implementation of NGEU funds.
The election results show a very open electoral landscape—with a narrow victory by the SPD. These elections are important because they signal the start of an electoral cycle in the major European countries, within a context plagued with problems needing to be resolved.
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.