Brussels improves Spain’s growth forecasts to 6.2% in 2021


Correspondent in Brussels

Updated:

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The European economy will recover faster than expected, since activity in the first quarter of this year has exceeded expectations and the improvement in the health situation has seen a rapid easing of restrictions in the fight against the pandemic in the second trimester. According to the European Commission’s summer economic forecasts, the economy of the EU and the euro area will grow by 4.8% this year and 4.5% in 2022. Compared to the spring forecast, growth for 2021 is significantly higher, 0.6 more for the EU as a whole and 0.5% for the eurozone. For the euro zone, it is considered that
reactivation has started a quarter earlier than expected
in the spring forecast.

Spain is expected will grow 6.2% this year and 6.3% next year in a scenario in which inflation may reach 2.1% in 2021 and fall to 1.4% next year, which falls within the margins of the whole of the EU where it is expected to arrive 2.1% this year and 1.6% next year. The Commissioner for the Economy, Paolo Gentiloni, considers that in the case of Spain “the implementation of the recovery plan will provide an additional boost, particularly in 2022”, that is, it excludes a special effect of European funds for this year.

The Commission considers that
the reopening of the activity particularly benefited companies in the service sector
. The forecasts take into account the optimistic consumer perception and companies that suggest that there is already a strong rebound in private consumption.

In addition, the Commission expects that a reactivation of tourism activity within the EU has already begun, which should benefit even more from the entry into force of the new Covid Certificate as of July 1.
The Commission has not taken into account the most recent epidemiological data
which in certain cases are becoming worrisome and are leading to the reversal of some of these measures.

According to Gentiloni, «the virus variants represent the main risk and if the vaccination policy does not progress, especially in the most vulnerable countries, the recovery may weaken again ”.

Gentiloni has said to be aware that in Spain «we are witnessing an increase in pollution as happens in several countries, we cannot ignore it. But the vaccination campaign is paying off, the vaccines are effective for the delta variant. In our forecasts we have used data until the end of June, so we must continue to be vigilant about the situation. In addition, to prepare the forecasts “we have included factors that we know well in Spain, such as that many investments in have been anticipated in this first part of the recovery plan.”

Asked about his expectations regarding the fulfillment of the commitment to present a reform of the labor legislation before the end of the year, Gentiloni stated that he had data that the negotiations between the employers and the unions “are going well. We are attending these negotiations with interest in the hope that the conclusion will be positive, according to the expectations expressed by the Government in the recovery plan that it presented.

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