Banco de España
La economía española en 2022. Situación y retos para la política económica

Situation and challenges of the Spanish economy looking forward

Speech by Pablo Hernández de Cos, Governor of the Bank of Spain, about the Spanish economic outlook over the next three years. The institution's projections are positive but are subject to various elements of uncertainty that will condition the recovery. The easing of supply chain distortions and inflationary pressures, the use of European funds and the maintenance of favorable financing conditions will be key to support the economic recovery.

Key messages of the speech:

  • Growth of the Spanish economy over the next three years. The Bank of Spain's predicts a positive recovery path over the next three years, with annual GDP growth at 4.5% in 2021, 5.4% in 2022 and 3.9% in 2023. GDP will recover to its pre-pandemic level by end of this/early next year, and "activity is expected to resume higher growth as supply chain distortions and inflationary pressures ease and tourism flows gradually normalize."

  • The pandemic remains the main source of economic uncertainty. 

  • Moderation of the global supply chain problem in the second half of 2022. Supply chain "bottlenecks" have shown "greater persistence than anticipated".

  • Reduction of inflationary pressures. “The gradual disappearance of base effects and bottlenecks and the partial reversal of the increase in energy prices, to which futures markets point, should reduce inflationary pressures throughout 2022”. However, there are two sources of risk that could still push inflation higher:

- A rise in energy prices due to an upsurge in geopolitical tensions.

- A rise in wages that would transform into a larger spike in prices.

  • Next Generation EU (NGEU) funds and structural reforms, the main recipe for solving the economy's main challenges: Low productivity, high structural unemployment, the fight against climate change, population aging and inequality.

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