The latest figures from the Spanish statistical agency INE show that the Spanish economy continued to recover in the final quarter of 2021, with growth of 2%, a marked increase on the expectation of economists who were predicting an increase of less than 1.5%.
Overall Spain´s GDP grew by 5% in 2021 – reversing the pandemic induced recession of 2020 which saw the economy contract by nearly 11%.
According to the OECD Economic Outlook the good news is set to continue with projected growth of 5.5% in 2022 and 3.8% in 2023.
The report expects that “ domestic demand will be the main driver of growth as higher confidence, improving labour market conditions, favourable financing conditions and the Next Generation EU funds boost private consumption and investment”.
The OECD concluded that the economy was showing a ” strong, resilient and inclusive recovery from the COVID-19 crisis” but ·requires improving productivity growth, by boosting digitalisation, innovation, and investment in intangible capital. It also requires addressing long-standing structural problems in the labour markets, reinforced by the pandemic: high unemployment, insufficient skills, large regional variation and a large share of workers on non-regular contracts”.
In addition, the economy is expected to be boosted by the return of travel and tourism.
The industry is one of the main components of the Spanish economy and represents around 14% of the total.
The last quarter of 2021 saw a 19.4% leap in the hospitality sector.
The economic good news is reflected in the latest unemployment rate which is the lowest it has been since 2008.
The overall rate fell to 13.3% at the end of December, down from 16.13% a year earlier representing some 3.1 million people without work.