In the second quarter, Spain almost quadrupled the economic growth of the Organization for Economic Co-operation and Development (OECD) as a whole. The institute itself confirmed this Monday that GDP (gross domestic product) in our country increased by 1.1% from April to June, compared to an average of 0.3% among the 38 states included in it.
The OECD also notes that Germany recovered to pre-pandemic activity levels at the end of this second quarter, the last of the seven largest economies (G-7) to have not yet achieved that. Spain has yet to catch up and is expected not to do so until late 2023 or early 2024, after the recovery slowed due to the inflation crisis and uncertainty caused by Russia’s invasion of Ukraine.
This delay in the reconstruction of Spain after the historic covid shock is explained by the increase in GDP in the service sector and specifically in tourism, which this year experienced the first full high season since 2019, without restrictions, with a general obstacle. price increase.
Nevertheless, our country leads the growth estimates for the end of this 2022 and 2023 and may be the only major economy in the Eurozone that has escaped the recession that is dangerously threatening Germany.
“In July, the PMI index for the manufacturing sector was 48.7 points, which is the lowest since May 2020 and indicates a decline in activity in the sector (a record below 50, an indicator of growth). Thus, the industry faces steep price increases, greater uncertainty and a worsening economic outlook. In contrast, the equivalent indicator of the service sector remained practically unchanged at 53.8 points (54.0 in the previous month) and significantly exceeded the growth rate. The good performance of the sector reflects the re-opening of the economy and the recovery of the tourism sector,” explains Caixabank’s analysis team.
Bank of Spain: “We do not see a recession”
“We don’t see a recession on the near horizon in Spain, far from it. We are going to grow by 4% this year and by 2023 the rates will be around 2%, point up, point down,” Margarita Delgado, deputy governor of the Bank of Spain, said recently.
The institution enters the debate with an upbeat view of the risk of a slowdown in economic activity after the end of 2022, exacerbated over the summer by stifling month-on-month price increases at the end of an era. Low interest rates, which increase the cost of financing for companies and households, and the unrest and general uncertainty caused by the Russian invasion of Ukraine, specifically in relation to energy and industrial raw materials.
The end of the pandemic maintains the background of economic recovery. Reconstruction after the COVID shock, facilitated by historic plans and stimulus, has now continued with shock measures in response to war and the energy crisis. And this is mainly based on the explosion of demand with the end of restrictions, a good moment in the labor market and public and private investment.
“Of course, there is no such thing as zero risk,” explained Margarita Delgado. “There is uncertainty, we cannot rule out that some quarters may not be very positive at all, that the potential shutdown of Russian gas supplies to Europe, fundamentally to Germany, may have a negative impact on economic growth,” he explained. .
“Spain has a better starting point because there is not expected to be an energy shortage.” Europe depends on Russian gas, some countries more than others, like Germany or even Italy. But for better or worse, we live in a global world. And although our exposure as a country to the Russian economy is very small, beyond some commercial elements, the increase in the price of energy means that all imported products go up, causing inflation to rise in Spain as well,” they explained. Deputy Governor of the Bank of Spain.
Source: El Diario