BBVA predicts that only six Autonomous Communities will recover the GDP before the pandemic before 2024
The economic reactivation goes by neighborhoods, or, in this case, by autonomous communities. While a small group of autonomies already see the recovery of pre-Covid levels of well-being on the horizon, the vast majority will have to wait until 2024 to reach that milestone. A four-year period lost in terms of economic development like one more scar caused by the pandemic.
The latest Regional Observatory published quarterly by BBVA Research, the bank's prestigious economic analysis service, predicts that only half a dozen autonomous communities will reach their pre-pandemic GDP levels by the end of 2023, while the rest will have to wait at least until 2024 to reach that milestone that according to all the organizations the whole of Spain will also achieve in the last stretch of next year. The select group of lucky ones is made up of the Community of Madrid, Andalusia, the Valencian Community, Extremadura, Castilla-La Mancha and the Region of Murcia and they will return to that point in some cases because they felt the impact of the pandemic less intensely and in others because its economic reactivation has been more powerful than that of its neighbors.
The Community of Madrid and Andalusia, for example, showed above-average growth in 2021 and according to BBVA Research they will do the same in 2022 and 2023, if the forecasts of the analysis service are met. In the case of the Valencian Community, despite the fact that a similar performance to that of the rest of Spain is expected in 2022 and 2023, the strong growth of 2021 and the smaller drop experienced in 2020 place it in a position to return to the starting point before of 2024. Extremadura, Castilla-La Mancha and the Region of Murcia experienced a lower-than-average drop during the pandemic and have been maintaining a growth rate that will allow them to recover the level of local production prior to the pandemic within the first group.
Among the autonomous communities that will not recover their pre-Covid production until at least 2024, there is everything. Cases such as that of Catalonia, which although it shows a recovery similar to that of the rest of Spanish territory, is paying for the collapse that its economy experienced in 2020 (-11.5%), in which it was the most affected territory outside of the autonomies insular; others like the Basque Country that are recovering at a slower pace than the rest of Spain; or the unique case of the island communities, the Canary Islands and the Balearic Islands, which although are growing at a much higher rate than averageIn the heat of the recovery of the tourism sector, they still have wounds to heal due to the severe blow that the pandemic caused to their productive fabric, highly dependent on tourism.
Looking ahead to this year 2022, the events of recent weeks have changed the expectations that BBVA analysts had about the growth of the autonomous communities. The recovery of investment in machinery and capital goods -one of the pleasant surprises of this first half of the year- has improved the growth expectations of the autonomous regions of the north, with a greater weight of industry, which has encouraged a review of the rise in growth forecasts for Asturias, Aragon, the Basque Country, Navarra and La Rioja. The BBVA studies service has also raised its expectations regarding the Balearic and Canary Islands due to the recovery of foreign tourism, apparently more powerful than initially expected.
In contrast, inflation and the erosion it is causing in the consumption patterns of Spaniards has encouraged BBVA to moderate growth expectations for 2022 in Madrid, Catalonia, the Valencian Community, Extremadura and the Region of Murcia.
The greatest economic growth is expected this year in the Canary Islands (8.7%) and the Balearic Islands (7.5%), while the regions that will grow the least will be Castilla y León (2.9%), Aragón and Cantabria (3. 3%, both), in a context in which the Spanish economy is expected to grow by 4.1%. Among the territories that act as the economic engine of the country, the Community of Madrid will grow by 4.3%, Catalonia, by 4.1%; and the Basque Country, 3.5%.