Page 24 - economic report 2021

the pandemic, but there have been periods of In 2021, GDP grew 5.1% but did not
high uncertainty due to the various waves of regain pre-pandemic levels.
the virus.

Since the spring of 2021, progress in the vaccination process has helped to contain the spread of
the virus and reduce the number of serious cases especially. This change enabled gradual easing
of pandemic containment measures and progressive normalisation of activity, especially in the
branches that require a greater level of social interaction. In effect, after the 0.5% reduction in the
economy in the first quarter and 1.1% growth between April and June, GDP dynamism increased
in the third and fourth quarters of the year, to 2.6% and 2.2% quarter on quarter, respectively.

In 2021, services led the recovery The economic recovery impacted all economic
of the Spanish economy. sectors, but to different degrees. In 2021, the
services sector led the economic recovery due
to its relative importance (67% of GDP) and the
strong rebound that occurred (6%). Within services, those that saw the strongest growth were
those that require social contact, as they benefited from the gradual removal of restrictions as
the health situation improved. Specifically, GVA in commerce, transport and hotels and catering
increased 14.2% year on year (after a fall of 25.7% in 2020), while in activities related to public
services (administration, health, education and social services) and professional activities, it grew
3.1% and 4.7%, respectively. Industry also saw positive behaviour but less strong (5.2%), while
construction and agriculture saw downturns (-3.4% and -3.7%, respectively).

Spain saw slower GDP recover
GDP GROWTH IN SPAIN AND THE
22 Chart 3.1 than in the Eurozone.
EUROZONE - Annual variation rates, as %

In 2021, the Spanish economy grew at a slower
rate than the Eurozone average (5.3%), even
though the EMU had fallen less in 2020 (-6.4%).
So, on comparing Spain’s economic growth data
with those of its European counterparts, the
The external environment of the Andorran economy | III. The Spanish economy
evaluation is not so positive, since the process
of economic recovery in Spain is slower. In
2021, Spanish GDP reached 93.8% of the level
it had in 2019; on the other hand, Eurozone
Spain Eurozone
GDP was 98.6% of the 2019 level. The delay
f: European Commission forecasts (May 2022).
in economic recovery compared with other
Source: Eurostat.
European members can be explained not only
by the predominance of tourism in the economy
but also because the Spanish economy contains a series of internal vulnerabilities that make it less
resilient, such as a high degree of temporary work in the labour market, a large proportion of small
and medium-sized businesses (with less capacity to withstand a sudden drop in income) and high
public debt, which limited the approval of more robust fiscal policies to protect household income
and the production network.

Both domestic and foreign demand had a positive impact on the trend in GDP in 2021, but the
former was more important. On the one hand, national demand contributed 4.6 points to GDP
growth, after a negative contribution of 8.6 points in the previous year. On the other hand, foreign
demand made a positive contribution of 0.5 points (-2.2 points in 2020), thanks to the recovery in
exports of both goods and services (tourism). Specifically, the inflow of foreign tourists went from
18.9 million in 2020 to 31.2 million in 2021, with 64.7% growth. Although this figure is clearly