Page 25 - economic report 2021

In 2021, domest c demand made a positive, it has to be considered alongside the
more posit ve contribut on to GDP fact that foreign tourism is still far from pre-
recovery than foreign demand. pandemic figures (Spain received 83.5 million
foreign tourists in 2019). Finally, the Spanish
economy ended the year with a surplus in the
current account balance of 0.9%, a figure that continues a positive trend in comparison with 2020,
when the surplus was 0.8% of GDP.

Within domestic demand, private consumption was behind the economic recovery in 2021,
especially in the second half of the year, thanks to easing of the restrictive measures on economic
activity and also the high level of savings amassed during the pandemic. Nevertheless, household
consumption in 2021 was still about 6.3%
lower than in 2019. Although in year-on-year In 2021, private consumpt on and
terms, growth in private consumption was investment grew strongly, but did not
lower than in GDP (4.7% compared with 5.1%),
the significance of this component (which regain pre-pandemic levels.
represented 55% of GDP in 2021) meant that
its contribution to GDP growth was 2.6 percentage points (practically half of the growth in the
Spanish economy in that year). In contrast, growth in public administration consumption was two
tenths lower than the figure in 2020, being 3.1%. It is important to note that, from the start of the
pandemic, public consumption grew due to increased procurement in the public sector (health,
education and public administration) and the aid to the most affected groups.

Investment also saw a very positive trend in
UNEMPLOYMENT RATE IN SPAIN 2021, with growth of 6.8%, a clearly higher rate
As % of active population Chart 3.2 to that of overall GDP. This dynamic is a clear sign 23
of economic recovery, as investment reflects
increasing confidence in economic development
and in future business profits, although it also
benefited from the ECB’s expansive monetary
policy. Moreover, the arrival of €9,000 million
from the Next Generation EU fund in 2021
meant an additional input of funds, although
the multiplier effect on private investment was
very small this year.

The labour market saw a positive trend in
f: European Commission forecasts (May 2022). 2021, in line with the gradual normalisation
Source: Eurostat. of production. However, the trend was also
influenced by the successive waves of COVID-19,
especially in the first few months of the
The unemployment rate at the year (third and fourth waves). Nevertheless,

end of 2021 fell to the lowest implementation of the furlough scheme (ERTE/ The external environment of the Andorran economy | III. The Spanish economy
level since the 2008 crisis. ERTO) softened the impact of the crisis on the
labour market. This scheme, implemented in
most European countries during the pandemic,
allowed businesses to reduce their workforce without destroying jobs, as they continued to be
registered with social security and received a benefit from the state. Remember that at the end of
April 2020, this reached a historic high of 3.5 million workers under the ERTE scheme (19% of the
employed population). As the health situation improved and restrictions were raised, the number
of workers under ERTE fell progressively and significantly, ending 2021 at 120,000 (only 0.6% of
the employed population).