Page 28 - economic report 2021

execution of Next Generation investment
SPAIN. MAIN MACROECONOMIC projects and recovery of tourism will stimulate
AGGREGATES - Interannual variation rates Table 3.1 growth. There is the risk that higher inflation
will become established if more upsets in the
2019 2020 2021 energy market or a more fluid transfer to final
Components of demand wages occur. On the other hand, the Brussels
Private consumpt on 0.9 -12.2 4.7 agreement to limit the price of gas on the
Public consumpt on 2.0 3.3 3.1 Iberian peninsula, which came into force mid-
Gross f xed capital format on 3.2 -11.4 6.8 June, could help to contain rising energy prices.
For the year as a whole, inflation forecasts are
Domest c demand (a) 1.6 -8.6 4.6
close to 7-8%, while the unemployment rate
Exports of goods and services 2.5 -20.1 14.7 could fall from 14.8% in 2021 to 13.4% in
Imports of goods and services 1.2 -15.2 13.9
2022, according to the European Commission.
Components of supply
Agriculture, livestock and fishing -2.5 4.3 -3.7 The public def cit will cont nue
Industry 1.4 -10.1 5.2 to decrease but much more slowly
Construct on 5.3 -11.3 -3.4 due to the new measures to tackle
Commerce, transport and hotels 2.3 -25.7 14.2 the ef ects of inf at on.
& catering
Informat on and communicat ons 4.9 -6.5 5.1
Financial and insurance act vit es -3.5 6.1 7.1 Due to the strong growth in revenue and
gradual removal of expenditure related to
Real estate act vit es 2.7 1.6 0.9
Professional act vit es 6.4 -16.3 4.7 COVID-19, the European Commission predicts
Public admin., health and educat on 1.3 -0.1 3.1 that the public deficit will shrink two points
in 2022 and reach 4.9% of GDP. To offset
26 Art st c, recreat onal & other 0.6 -24.7 0.4
act vit es the negative impact of the war, the Spanish
government passed a €6000 million plan in
GDP at market prices 2.1 -10.8 5.1
March (0.4% of GDP, to be extended until
(a) Contribut on to growth of GDP at market prices. September) which includes a €0.2/litre fuel
subsidy, an extension of the existing energy
Source: Nat onal Inst tute of Stat st cs (INE).
tax rebates and direct support to the most
affected sectors. Moreover, a new line of
The external environment of the Andorran economy | III. The Spanish economy
credit of €10,000 million (0.6% of GDP) has been set up for vulnerable businesses. In July, the
Spanish government passed new measures, such as free transport on trains, and announced the
creation of new taxes on financial institutions and electricity companies to finance them. The
effectiveness of all the measures adopted to contain inflation and their indirect effects will partly
depend on how dynamic activity is over the next few years in Spain.

In such a volatile context, risks point predominantly to a downturn in the case of economic activity
and a rise in inflation. The degree of uncertainty in the economic forecasts is particularly high and
will basically depend on several factors: the duration and intensity of the Russia-Ukraine conflict;
any future trend in energy prices; the second-round effects between prices and wages; the
strength of the recovery in tourism, and the rate of execution of European funds. The response
from economic policies will also influence the dimension of the economic impact of the war.