According to the European Commission the Spanish economy will experience the highest GDP rebound of the entire EU with figures of 5.6% in 2021 and 5.3% in 2022
After experiencing the largest economic contraction in the European Union, Spain is set to make its biggest comeback.
The European Commission just recently published its 2021 Winter Forecast, which raised Spain’s gross domestic product (GDP) growth prospects for this year to 5.6%, three tenths of a point more than previously expected.
By 2022, the EU executive forecasts a GDP growth of 5.3%, compared to the previous figure of 4.8%. These figures place Spain at the head of economic growth in Europe.
The European Commission’s forecast falls below the Spanish government’s own estimate of 7.2% growth, although Brussels has pointed out that it did not take into account the impact of the European recovery fund, which will offer Spain up to 140 billion euros in grants and loans. Madrid estimates that this financial boost will add 2.1% to the growth rate.
A delayed but stronger recovery
The Brussels report shows some optimism after Germany and Spain ended 2020 in a better position than expected.
“Overall, while the outlook for the near term looks weaker than expected last autumn, growth in the European economy is set to resume this spring and gather momentum in the summer, as progress in vaccinations allows for a gradual unfreezing of economic activity. External demand is also set to support the recovery on the back of an improved outlook for the global economy”
The Commission said that GDP growth in the EU will be 3.7% in 2021 and 3.9% in 2022. For the euro zone, it forecasts the same growth rate of 3.8% in both years.
Tourism: a slow recovery
However, the report notes that the recovery will not be the same in all countries. This may be the case with Spain, where tourism is one of the main contributors to GDP. The industry has been deeply affected by the impact of the coronavirus crisis, which reduced the number of visitors to a trickle last year.
The report speaks of a “soft recovery” of tourism in Spain this year, while “in 2022, the recovery of tourism is expected to gain momentum, with most of the impediments to activity completely removed.”
Exports, investment and domestic demand are also expected to recover as restrictions are progressively lifted.