The GDP (gross domestic product) of Spain grew by only 0.2% in the first quarter of 2022 compared to the fourth quarter, one tenth less than expected by the INE, due to the first impact of the omicron variant of COVID and after the war in Ukraine and the stoppage of the road transport sector.
Families begin to cut spending to withstand inflation
"In the first quarter of 2022, the Spanish economy grows at a rate similar to that of Germany and higher than those of Italy and France," defend sources from the Ministry of Economic Affairs, who emphasize that "the strength of employment is certified, with the creation of 934,000 full-time jobs in the last year and the practical recovery of the hours worked compared to those before the pandemic (99.5%)”.
However, Spain's GDP is still almost 3.5 points below pre-COVID levels, while economic activity in most developed economies has already fully recovered. If the contractions in GDP caused by the different waves of the pandemic since 2020 are not taken into account, the growth rate for the first quarter of 2022 is the lowest since 2013.
More business investment, less household consumption
"The increase in investment in capital goods is intensifying, which highlights the positive effects of the Recovery Plan on the expectations and spending of companies", continue from the Ministry in which the first vice president Nadia Calviño is in charge .
A situation that contrasts with households, which reduced their consumption between January and March, compared to the final quarter of 2021, by 2%. Of course, 1.7 points less than what was advanced by the INE.
Family consumption initially hit by omicron infections and definitively curbed by the peak in inflation caused by the invasion that Russia began at the end of February. A crisis that has triggered electricity prices and the fuel due to the disturbance caused by the conflict in the international oil and gas markets, raising production and transport costs and damaging the purchasing power of households, especially the poorest.
Household consumption remains nearly 8 points below the pre-COVID level, which leaves room for it to be one of the main growth accelerators, although both in the second quarter of this year and in the summer it could continue to be slowed by inflation.