Spanish economy grows 5% in 2021, well below the Government forecast

The National Institute of Statistics (INE) released on Friday its advance data on the results of the Spanish national accounts.

Data from the statistical office show that the gradual recovery in activity during 2021 has led the Spanish economy to close the year with cumulative year-on-year growth of 5%, the greatest advance since 2000.

In the fourth quarter, the Gross Domestic Product (GDP) increased by 2% compared to the previous one and 5.2% compared to the same period of 2020.

These macroeconomic data would be excellent if it weren't for the fact that they come after the worst year on record: the Spanish economy collapsed 10.8% in 2020. As if that weren't enough, the 5% growth achieved in 2021 is 1.5 points lower than the 6.5% forecast by the Ministry of Economic Affairs headed by Nadia Calvino.

The government forecast has not been met, and in part it has been due to the very strong inflation registered at the end of the year (6.5% in December), largely motivated by the extremely high energy prices.

Foreign demand

The inflation, together with the emergence of the Omicron variant of Covid-19 and the return of some restrictions, have caused a containment of household consumption, which fell by 1.2% in the last quarter of the year compared to the previous one. Investments, however, accelerated 8.5% quarterly.

In the last quarter of 2021, the foreign demand (exports and tourism) has been a great growth driver. Exports grew by 6.5% quarterly and 15.8% compared to the previous year, thanks largely to the recovery in tourism. Imports increased 3.5% from the previous month and 11.1% year-on-year.