The Spanish government is confident that the first quarter of 2022 will be the first with a higher level of economic activity than in the same period of 2019.
The First Vice-President of the Government and Minister for the Economy and Digital Transformation, Nadia Calviño, has briefed the Council of Ministers on the economic situation and presented the update of the macroeconomic framework that will accompany the upcoming presentation of the draft General State Budget for 2022.
Calviño stressed that indicators suggest that the Spanish economy will recover to pre-pandemic daily activity and employment levels before the end of the year.
This recovery, she explained, rests on five pillars: the success of the vaccination against Covid-19, the recovery of international tourism, the dynamism of consumption, a notable increase in investment and the accelerated roll out of the Recovery, Transformation and Resilience Plan.
Nadia Calviño has detailed that Spain significantly outperforms the main countries in terms of vaccination rate, which has allowed an increase in economic activity and mobility.
The recovery has been strongest in the accommodation and catering sectors, two of the hardest hit by the pandemic, which are already above 2019 spending levels.
The Executive estimates that citizens have saved 50 billion euros during the pandemic, which allows for a positive evolution of consumption in the coming months. Moreover, the Gross Domestic Product (GDP) for tourism is close to 50% of that of 2019, which was a record year, thanks to the reactivation of foreign tourism during the summer months.
The first vice-president assured that the key differential factor in this recovery is the dynamism of investment, which in 2022 will reach levels higher than those before the pandemic. Construction - she added - is still below expected growth, but everything points to a strong recovery of investment in capital goods, a development directly related to the business support measures adopted since March 2020, the extraordinary benefit for the self-employed and direct aid to solvency.
Nadia Calviño specified that the first quarter of 2022 will be the first with a higher level of economic activity than that recorded in the same period of 2019, and pointed out that "there is no precedent in Spain's recent economic history for such a rapid recovery in activity and employment", which she attributed to the different economic policy responses, on a national, European and global scale.
"Monetary and fiscal policy support has been key to this rapid exit, to avoid permanent damage, particularly in terms of job destruction, which would have led to a slower recovery and further damage to the productive and social fabric," she remarked.
The vice-president detailed that the growth forecast for 2021 and 2022 is maintained (6.5% and 7%, respectively) thanks to the drivers of consumption and investment in capital goods, which will increase by 16.5% this year and 18.3% next year. The foreign sector will continue to make a small positive contribution to GDP growth.
Regarding the upwards revision of the Organisation for Economic Co-operation and Development (OECD) forecasts for Spain to 6.8% in 2021, the highest rate in Europe, Calviño stated that it is important to remain prudent, given the uncertainty about the evolution of the pandemic at a global level and other geopolitical factors.