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The GDP of Catalonia will increase above the state average during 2022 and 2023

The GDP from Catalonia will grow by 4.2% and 3.5% in the years 2022 and 2023 respectively. He will also lead, together with Canary Islands, Balearic Islands, Madrid’s community Y Estremadurathe growth of the state GDP during the same years, according to the latest forecasts of BBVA Research.

The Regional Observatory for the second quarter of 2022 of BBVA Research revises down the growth forecasts in all the autonomous communities for 2022 and 2023 as a consequence of the war in ukraine. Although the direct effect of the fall in demand on the economies of Russia and Ukraine is limited, the greatest impact will be due to the oil price increasewhich will mainly affect industry, the agri-food sector and construction.

Therefore, the revision of the forecasts in Aragon, Castile and Leon, Cantabria, Basque Country, Galicia, Asturias, Navarre, The Rioja Y Castilla la Mancha is greater than that of the state as a whole and its growth will be below that forecast for Spain.

In the autonomous communities with an activity more oriented towards tourism and personal services revision of growth forecasts is lower than average. Thus, the BBVA Studies Service forecasts that growth will continue to be led in 2022 and 2023 by the Canary Islands, the Balearic Islands, Madrid and Catalonia, together with Extremadura.

For their part, Andalusia, the Valencian Community and the Region of Murcia could grow in line with Spain, favored by a lower weight of energy in their economies, as well as by less exposure to international bottlenecks, in addition to the compensating effect of tourism.

positive growth

BBVA Research forecasts that by the end of 2023, all the autonomous communities, except Asturias, the Basque Country, the Balearic Islands and the Canary Islands, recover the level of GDP prior to the pandemic. In the case of Catalonia, it is expected that next year its growth (3.5%) will be two tenths above that of Spain as a whole (3.3%).

For their part, the Valencian Community, Andalusia and Murcia would grow in line with the Spanish average, while the growth forecasts would be below average in Castilla-La Mancha (3.1%); Aragon and La Rioja (3.0%); Basque Country (2.6%); Navarra (2.5%); Galicia and Cantabria (2.3%); Castilla y León (2.1%) and Asturias (2.0%).

In the years 2022 and 2023 the GDP of Catalonia and Spain will increase. In addition, they will do so in a similar way, with the differences in growth being 0.1 points this year and 0.2 points in 2023.

Several factors would explain the dynamism of the activity. Thus, although the war in Ukraine, the inflationthe uncertaintythe transportation strike and the associated tensions would have slowed the recovery of household consumption in the first quarter of 2022, spending levels continue to be considerably high compared to 2019 records. In addition, tourism recovers favored by less health uncertainty in Europe.

In addition, enrollment in Social Security continues to increase and investment accelerates supported by greater execution of European funds Next Generation EU, progress towards renewable energies and new policy objectives. This more investment-oriented growth could help recovery in northern communities.

employment increases

Employment is expected to grow in Catalonia during the next biennium at a rate of 2.3% and 1.7% respectively. An increase in affiliation to Social Security is also expected in the State as a wholebeing 2.1% the growth of the affiliation expected this 2022 and 1.7% the expected increase for 2023.

The recovery scenario forecast for the coming quarters could be affected by the rise in inflation, due in part to the high cost of energy. In this way, communities with a greater weight of energy expenditure with respect to total household spending could see their disposable income limited.

Some of these communities are Murcia, Castilla-La Mancha or Galicia. On the contrary, in the Mediterranean communities the effect of the higher price of energy and fuels in households could be somewhat less.

Persistent inflation, which drives wage growth and business costs, also poses the risk of a loss of competitiveness, the effects of which could be more relevant for communities with specialization in the production of tradable goods and exposure to foreign markets. The uncertainty in the most touristic autonomous communities increases due to possible spikes in Covid infections as summer approaches.

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