The Spanish economy grew 2% in the third quarter compared to the previous quarter, a rebound of nine tenths compared to the figure registered in the second quarter where the national gross domestic product (GDP) rose 1.1%. So far this year, GDP accumulates a quarter-on-quarter growth of 2.5% after a first quarter in which it contracted six tenths.
Although the growth data in the third quarter is the best of all those reported throughout the year, it does not seem to be enough for the Government’s forecasts to materialize.
The Executive estimated in the bill of General State Budgets a rebound of 6.5% of GDP for this year and 7% for the next. In addition, it should be remembered that the additional difficulties that the pandemic has introduced when calculating GDP caused the statistical institute to correct its progress in the second quarter , reducing growth from 2.8 to 1.1%.
The data for the third quarter reflects that the recovery of the economy is advancing vigorously but with less force than expected by most analysts just a few months ago. The downward correction introduced by the INE last September fell like a jug of cold water on expectations and has caused the analyzes published since that date to place growth for this year around just over 5%.
Stock image of bricklayers working on a construction site.
In the middle of this month, the International Monetary Fund (IMF) was one of the first analysts to cut the expected rebound for this year. Then its economic projections lowered the expected growth from 6.2 to 5.7%. This same week the governor of the Bank of Spain, Pablo Hernández de Cos, announced before the Budget committee of the Congress of Deputies that the banking supervisor expects ” a significant downward correction” in economic growth for this year.
Although the Bank of Spain did not give concrete figures, Airef did, whose president Cristina Herrero appeared on the same stage a few hours later. Herrero drew a panorama in which the Spanish economy would grow by 5.5% in 2021 and gave only a 40% probability that the forecasts made by the Government for the Budgets would materialize.
The latest estimate of known relevance, made public on Wednesday by Funcas – a foundation owned by the main savings banks – further dampened expectations. Analysis stood at s olo 5.1% growth expected this year and by 1.2 percentage points trimmed its estimates of only three months ago.
The sticks in the wheels of recovery
After the disappointing growth data for the second quarter, hopes were pinned on the third, in which the summer tourist season, high vaccination rates and few restrictions due to the pandemic concentrated the conditions conducive to consumption.
However, the outlook for the remainder of the year, with the period of high Christmas consumption on the horizon, is increasingly less rosy. Most analysts agree that elements that a few months ago were considered only a risk – such as the energy price crisis and bottlenecks in the global supply chain – are beginning to become a reality.
Without going any further, the inflation data known on Thursday reflects that the prices of the main consumer goods increased in October by 5.5% compared to the same month last year, an increase that, although it is driven by the rise in the bill light and fuel are gradually seeping into other products.
The energy crisis adds to the shortage of certain key raw materials such as semiconductors, some metals or paper and the global transport traffic jam that is making it difficult to supply some products and making others more expensive. All of this threatens to boycott a recovery that in Spain depends largely on domestic demand.