Bank Of Spain ‘Confident Over Recovery’ As Economic Growth Forecast Rises To 6.2%

Bank Of Spain ‘Confident Over Recovery’ As Economic Growth Forecast Rises To 6.2%.

The Bank of Spain believes that activity will return to pre-pandemic levels by the end of 2022 thanks to reopenings of businesses across the country that are supported by the much improved coronavirus figures.

The economic outlook for Spain is improving as the impact of the coronavirus pandemic eases. Declining coronavirus cases and deaths, coupled with a steady and succesfull vaccination drive, are stimulating activity, consumption and public confidence.

As a result, the Bank of Spain has slightly raised its 2021 growth prospects for the Spanish economy from 6% to 6.2% and for next year, the forecast is being raised from 5.3% to 5.8%.

Following an interruption of growth caused by the stricter coronavirus restrictions in force in late 2020 and early 2021, the economy is expanding again as reopenings get underway. Figures have been improving since March, said Óscar Arce, the Bank of Spain’s director general for economics, statistics and research.

This is especially noticeable in the number of contributors to Social Security, the drop in furloughed workers on the government’s ERTE scheme, mobility indicators, rising exports and confidence surveys. The polls are reflecting a robust industrial expansion and growth in services. The most recent available figures on fuel consumption remain around 10% below pre-pandemic times.

The Spanish Government had indicated signs of recovery since mid-April with an anticipated busy summer period of tourism to boost the nation.

Óscar Arce, the chief economist at the Bank of Spain said: “Things are getting better and the normal course of events would be for growth to accelerate gradually, always depending on the evolution of vaccines and barring any more trouble from the virus,” adding that, “The short-term risk used to be the pace of vaccination; now, with a view to the summer, the key lies in saving the tourism season; towards the end of the year, it will be important to implement the European funds.”

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