Spain Economic Forecast

Spain Economic Outlook

May 31, 2022

Growth weakened in the first quarter, as household spending was weighed down by surging inflation and the spread of the Omicron variant. Turning to Q2, in April, a robust recovery in tourism likely underpinned the tertiary sector, as signaled by a higher services PMI reading, while the rate of unemployment fell and retail sales rebounded strongly. However, elevated inflation, downbeat consumer confidence and a softer expansion in manufacturing activity call for caution. Meanwhile, the European Commission recently warned of imbalances in the public accounts, with the independent fiscal authority lamenting the absence of a medium-term strategy to bring them under control. Furthermore, the Bank of Spain has called for additional reforms to ensure the sustainability of the public pensions system.

Spain Economic Growth

Although the pace of growth will ease this year, it should remain relatively solid. A recovering tourism industry and EU fund inflows should underpin the economy. While accumulated savings and rising employment will provide support to consumer spending, it will be restrained by elevated inflation. Rising interest rates and a weak fiscal position cloud the outlook. Our panelists now project the economy to grow 4.4% in 2022, down 0.3 percentage points 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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