OECD Forecasts Further Improvement In Spain´s 2021 Recovery

March 10, 2021March 10, 2021 Madrid Metropolitan Business, spain economy, spain news

The latest report by the OECD paints a rosier picture for the global economy with improved prospects for most of the world´s leading economies including Spain.

The report by the Paris based Organisation for Economic Co-operation and Development, released yesterday, March 9th entitled Strengthening the recovery: The need for speed points to world economic growth of 5.6% up by 1% since the last quarter´s report.

The growth is attributed to a number of factors including the latest US stiumulus package of $1.9 trillion as well as an accelerating vaccine roll-out.

The report states that “world output is expected to reach pre-pandemic levels by mid-2021 but much will depend on the race between vaccines and emerging variants of the virus”.

Spain´s prospects for 2021 show strong growth of 5.7% and 4.8% in 2022 which means that the country will have reached it´s pre-pandemic economic level by the end of 2022 to recover from the fall of 11% in economic output suffered in 2020.

The Spain is also one of the biggest beneficiaries of the EU Recovery Package which include some 70 billion Euros in direct grants and an additional 70 billion Euros in soft loans.

The EU funds are tied to signifiant areas of labour, market and pensions reforms which Spanish governments have grappled with for decades.

Another major area of concern is the country´s structural unemployment level.

The latest government figures for February show that unemployment has just broken through the 4 million barrier for the first time since 2016 and is likely to increase further in the coming year with a spike expected with the end of the government´s furlough ERTE scheme in May.

The Socialist PSOE coalition government of Pedro Sanchez, last month announced an 11 Billion Euro fund for small and medium size businesses in struggling sectors such as tourism which had a catastrophic 2020.