The Bank of Spain (BdE) and the Government expect the Spanish economy to recover pre-covid levels over the coming months, sooner than the regulator had contemplated in its previous forecasts thanks to a boost in activity until March greater than what be dear. However, GDP is not the only indicator in which the country has not yet managed to restore the levels prior to the outbreak of the health crisis or in which its performance continues to be worse than then. In December 2020, Eurostat launched the ‘European Statistical Recovery Dashboard’, a tool that tracks economic and social recovery in the European Union as a whole, in the Eurozone and broken down by country.
For this, the community statistics office uses more than twenty different indicators that help visualize the effects of the pandemic. According to this dashboard, which is updated monthly, the country shows more negative records than 2019 in terms of growth, INFLACIWAHEG level of flights, in electricity consumption (in industry, services and homes), in the production of the sector of construction, as well as in relation to the deficit and debt. Outside of economic indicators, it is also in a worse position relative to excess mortality.
0.18% to definitively close the hole that the coronavirus opened in 2020. The European panel confirms this point that, on the other hand, is pending the review that the statistical agency will publish on June 23, when it will have more indicators for that period .
The resilience of the labor market, which is allowing household consumption not to fall as much as might be expected, and the strength of the foreign sector are behind an advance in the economy that has positioned Spain as the country that has grown the most in terms of year-on-year for the entire European Union, with an increase of 3.8% between January and March. This, despite the blow caused by inflation, another of the indicators that remains above pre-covid levels. 0.8% at the end of 2019.
The root of the bottlenecks of the pandemic and, above all, the energy crisis, which started in the summer of 2021 and was aggravated by the war in Ukraine, caused life to become more expensive by 8.4% per year. past. With the latest data available, from April, the Harmonized CPI -which is the rate that Eurostat takes as a reference to make its comparisons between countries- stood at 3.8% in Spain. The basket of goods and services with which inflation is measured only became less expensive in Luxembourg (2.7%) and Belgium (3.3%).
Neither tourism (although it is close)… nor construction
One variable that has not yet recovered the levels of the past is the number of flights, despite the good progress of tourism. According to Eurostat -which takes data from Eurocontrol, the European Organization for the Safety of Air Navigation- in April and despite Easter these were still 0.9% below pre-pandemic levels. More than 13.7 million international tourists traveled to Spanish destinations in the first quarter, 41.2% more than in the same period of the previous year, but 3.5% less than in the same quarter of 2019. However, their spending did exceed by almost a 12% pre-Covid levels after reaching 17,201 million euros, according to the INE Egatur survey.
GDP, inflation, flights… and electricity consumption, another of the indicators that are usually taken as a reference for the progress of the economy. The European statistical office points out that in March the demand was 6.7% below the pre-pandemic records. To analyze this variable, the energy consumed by end users, such as industries, services and households, measured in Gigawatt-hours, was taken as a reference. Yeraterma Ina The percentage variation for the last month in relation to the lowest value of the corresponding month in the period 2016-2019. Within the final specific economic sectors, construction also still has not fully recovered and, in fact, its indicator in March was more than 19 points below that of 2019.
The last of the deficit and debt
As is the case with the economies of the European Union and the Eurozone as a whole, the shock caused by the pandemic and by the energy and inflationary crisis aggravated by the war, forced the Government to deploy several packages of measures with which to protect families and companies. These extraordinary measures have meant that the group of European economies in general, and the Spanish one in particular, had to park the well-founded consolidation. Brussels, in fact, has kept fiscal rules (the obligation to stick to deficit and debt targets) suspended for three years. It will recover them in January of next year, when the reform of the Stability Pact, which must still receive the approval of the partners, will not yet be able to enter into force.
For now, Spain has promised to reduce the hole in its public accounts to 3% and debt to below 110% of GDP in 2024 to avoid sanctions for breaching those limits. There are organizations such as AIReF or the Bank of Spain that consider that the country will carry out a greater adjustment than expected in the 2023-2026 Stability Program in order to stick to the debt consolidation shipment. For the moment, Eurostat verified that this stood at 113.2% at the end of the last quarter of 2022 -in the first it has moderated to 113%, according to the BdE- far from the 98.2% that it registered in the same period of 2019. The deficit, meanwhile, closed last year at 4.8% of GDP, compared to 2.6% with which it ended the year before the pandemic.