The European Central Bank tries to cope, seven autonomous communities will still not have recovered the growth levels prior to the Covid pandemic, which led to the practically total stoppage of activity and dealt a severe blow to the service sector in general and in particular to tourism. The Foundation of Savings Banks (Funcas) places Extremadura, Catalonia, Castilla y León, Cantabria, Asturias, the Balearic Islands and the Canary Islands in this group.
Funcas, which has presented its economic forecasts for the autonomies this Monday, also improves its estimate of GDP for the whole of Spain this year to 1.3%, in line with what organizations have also done within (Bank of Spain) and outside the country (European Commission), due to the review carried out by the National Statistics Institute of last year’s data. At the end of last year, the volume of wealth prior to the outbreak of the health crisis in Navarra, Castilla-La Mancha, Murcia, Aragon and Galicia had already been recovered. They will be joined throughout this financial year by the Basque Country, Madrid, La Rioja, Andalusia and the Valencian Community. The Government of the Community of Madrid verified a few weeks ago that this milestone had already occurred, something that Funcas rules out with the information and macroeconomic indicators made public to date.
Throughout this year the slowdown will be common in all the autonomous regions as a result of the impact of inflation on the purchasing power of families, in a context of global uncertainty and more expensive financial costs due to the tightening of monetary policy . The cut in expectations is “patent” in relation to household consumption. In this scenario, the main engine of the will come, according to Funcas, the stimulus expected from European funds, as well as the total normalization of tourist activity.
In the foundation they point out that the pull of tourism should be especially favorable for the Balearic and Canary Islands, as well as to a lesser extent for Andalusia and Galicia. As for the effect of European funds, the regions with the greatest presence of the capital goods industry and advanced services to companies are the ones that could worsen the most, as is the case of Catalonia, Madrid, Navarra and the Basque Country.
The difference with the rest is not due to the territorial distribution of the Next Generation, which ensures a relative balance between communities, but to the “potential for taking advantage of these stimuli by the business fabric of the different regions,” says Raymond Torres, director of Funcas situation. Other autonomies, with a strong weight in the automobile sector, also have a significant margin of recovery. Castilla y León and Comunitat Valenciana are in this group.
As regards the unemployment rate, it is expected to moderate in the territories as a whole, although in Madrid and Navarra the average annual rate will still be above the level prior to the pandemic – within which it is two where unemployment was already found at relatively low levels of autonomy in relation to the rest of the communities. In the medium term, the expansion of employment “could be constrained by the loss of the population of working age, a phenomenon that is especially pronounced in Spain that is becoming depopulated,” Funcas warned.
