The decline in GDP growth in 2021 It will be generalized in the autonomous regions, especially in Madrid, Andalusia, Catalonia, the Valencian Community and Navarra, according to the BBVA Regional Observatory. In its report, it foresees that in the last quarter of 2020 the forecasts will improve in Cantabria, Galicia, the Valencian Community and Andalusia and a lower dynamism in Aragón, Madrid, Navarra and the Basque Country.
The upward revisions this year are mainly explained by the boost in exports of goods and industrial activity, and in Andalusia household spending also acts favorably, while the decreases are derived from the contraction in spending in the most affected communities for the pandemic.
According to the study, in 2021 the downward revision will be general due to the outbreaks of Covid in the European Union and Spain, the weakness in the recovery of investment and the exhaustion of demand impulses.
The pandemic makes this drop be greater in Madrid, Andalusia, Catalonia, Navarra and the Valencian Community, while the expectation of a vaccine that can favor tourism in mid-2021 supports a lesser revision of the forecasts in the Balearic and Canary Islands, which will be the ones that show the greatest recovery.
The regrowths and the extension over time of their economic effects affect more the autonomies with more consumption Social. Clarify that In Madrid, to the outbreaks we must add the difficulties to export non-tourist services and the unfavorable context for crowded events, such as event and business tourism.
The revision of GDP growth below the average for Andalusia, Catalonia and the Valencian Community is explained by the contraction of its own domestic demand, accelerated by the depletion of demand stimuli (more benefited by ERTE and other benefits) and a lower boost from domestic tourism. As for Navarra, he points out that the outbreaks are compounded by the slowness in the recovery of vehicle exports.
Less dense territories and with less dependence on the social economy, such as the interior regions, should notice a somewhat less impact of the pandemic on their activity, but they will not benefit equally from the improvement that could be observed in foreign tourism the following year, according to The report.
Extremadura, Aragón, Castilla-La Mancha and Castilla y León lead the group of communities with the lowest revisions, although the lower dynamism of the EU will also affect their exports of goods, if they are not promoted with public support to the automotive sector.
The expectation of a vaccine available in the first half of the year for developed economies and in the second for the others allows us to expect a somewhat faster recovery in foreign tourism, especially as of the second quarter of 2021, although still at very low levels. below end of 2019.
While waiting for the concrete definition of the reconstruction plans and the distribution of European funds, the study considers that it is difficult to know how they will benefit the different regions, so it does not apply a regional differentiation of these funds.