Spain Economic Forecast

Spain Economic Outlook

October 26, 2021

The recovery likely carried over into Q3, with consumer confidence, economic sentiment and PMI readings hinting at solid dynamics. That said, a still-subdued tourism sector, weak retail sales and downbeat industrial production in July-August call for caution. In other news, government coalition partners ironed out the 2022 draft budget and sent it to the European Commission in mid-October, after having agreed on a new housing bill which includes rent controls for landlords with multiple properties. Although the bill should lend some support to existing tenants, it looks set to discourage real estate investment. Meanwhile, the budget targets a seemingly optimistic 5.0% fiscal deficit for 2022 and includes higher spending on pensions, public workers’ salaries and public investment. It also sees a jump in tax revenues amid several tax hikes, which will likely weigh on the country’s competitiveness ahead.

Spain Economic Growth

GDP should expand solidly in 2022, amid loose fiscal and monetary policies and incoming EU funds, and as households spend accumulated savings. However, high energy prices will eat into consumers’ pockets, while lingering supply shortages could restrain growth. Troubled public finances and potential market-unfriendly labor reforms pose significant downside risks. Our panelists project the economy to grow 6.0% in 2022, which is unchanged from last month’s forecast, and 3.1% in 2023.

Spain Economy Data

2015 2016 2017 2018 2019
Population (million)46.446.446.446.446.7
GDP per capita (EUR)23,21924,00625,03625,88226,692
GDP (EUR bn)1,0781,1141,1621,2021,245
Economic Growth (GDP, annual variation in %)3.83.02.92.42.0
Domestic Demand (annual variation in %)4.12.13.12.71.5
Consumption (annual variation in %)2.92.63.01.81.1
Investment (annual variation in %)4.92.45.95.31.8
Exports (G&S, annual variation in %)4.35.45.62.22.6
Imports (G&S, annual variation in %)5.12.66.63.31.2
Industrial Production (annual variation in %)3.21.93.20.30.7
Retail Sales (annual variation in %)4.23.90.70.82.4
Unemployment Rate22.119.617.215.314.1
Fiscal Balance (% of GDP)-5.2-4.3-3.0-2.5-2.8
Public Debt (% of GDP)99.399.298.697.695.5
Inflation Rate (HICP, annual variation in %, eop)-0.11.41.21.20.9
Inflation Rate (HICP, annual variation in %)-0.6-0.32.01.70.8
Inflation (PPI, annual variation in %)-2.1-3.14.43.0-0.4
Policy Interest Rate (%)-  -  -  -  -  
Stock Market (annual variation in %)-7.2-2.07.4-15.011.8
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)2.03.22.71.92.0
Current Account Balance (EUR bn)21.835.431.123.324.9
Trade Balance (EUR billion)-24.2-18.8-24.7-33.8-32.0

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Spain Facts

Value Change Date
Bond Yield0.465.62 %Dec 31
Exchange Rate1.120.65 %Dec 31

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