MACROECONOMIC PROJECTIONS FOR SPAIN 2022-2024 - ÁNGEL GAVILÁN Director General Economics, Statistics and Research - Banco de ...
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MACROECONOMIC PROJECTIONS FOR SPAIN 2022-2024 ÁNGEL GAVILÁN Director General Economics, Statistics and Research Madrid 5 April 2022 DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA
CONTENTS
1. Overview
2. Developments in economic activity in the short term
3. Economic projections for the Spanish economy for 2022-2024
4. Main risks and sensitivity exercises
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 2
ÍNDICE
1. Overview
2. Developments in economic activity in the short term
3. Projections for the Spanish economy for 2022-2024
4. Main risks and sensitivity exercises
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 3
THE SPANISH ECONOMIC OUTLOOK IN THE SHORT AND MEDIUM TERM IS HEAVILY INFLUENCED BY THE
RUSSIAN INVASION OF UKRAINE
• National Accounts: data better than expected
Until the outbreak of the armed conflict in
• The Omicron variant had a smaller impact on activity than
Ukraine: activity posted upside surprises, as
previous waves of the pandemic
did inflation
• Initial signs of an easing of bottlenecks
• Sharp rise in commodity prices
The war in Ukraine: a considerable negative
• Sanctions against Russia and decline in trade flows
shock when the recovery from the health crisis
• Negative impact on agents’ confidence and financial
was still incomplete
dynamics
New macroeconomic projections: the • GDP is revised downwards in 2022 and 2023, and upwards
extraordinary uncertainty as to the duration in 2024
and intensity of the conflict makes it • Inflation is revised sharply upwards in 2022, although a
impossible to assess its precise implications gradual moderation is projected in the medium term
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 4
CONTENTS
1. Overview
2. Developments in economic activity in the short term
3. Projections for the Spanish economy for 2022-2024
4. Main risks and sensitivity exercises
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 5POSITIVE SURPRISES IN NATIONAL ACCOUNTS DATA WITH RESPECT TO THE BANCO DE ESPAÑA’S DECEMBER
PROJECTIONS
REAL GDP (quarter-on-quarter rates) QUARTER-ON-QUARTER GDP GROWTH (%) AND QUARTER-ON-QUARTER RATES
CONTRIBUTIONS (pp)
% and pp %
%
3.0 3.0 8 7.2
2.6
2.5 6
2.2 4.6 4.5
2.0 2.2
2.0 4
1.6
2.0
1.5 2 1.4 1.3
1.1 1.1 1.6
1.0 0
1.2 1.2
0.5 1.0 -2 -1.6 -1.5
1.0
0.0 -4
0.3
-0.5 -6
-0.5
-0.6
-1.0 0.0 -8
Mar-21 Jun-21 Sep-21 Dec-21 GDP Domestic demand Net external Private Gov. Invest. Housing Other Exports Imports
demand cons. cons. in capital invest. constr.
goods Invest.
3.0 1.6 2.2 1.2 1.2 0.3 1.0
2.0
1.0
0.0 BANCO DE ESPAÑA PROJECTIONS DEC-21 QNA 2021 Q4
GDP Domestic demand Net external demand
SOURCES: Banco de España and INE.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 6THE SPREAD OF THE OMICRON VARIANT AT THE END OF 2021 AND BEGINNING OF 2022 AFFECTED ACTIVITY
DEVELOPMENTS, BUT THE HIGH VACCINATION RATE LIMITED ITS IMPACT
COVID-19 IN SPAIN FULLY VACCINATED POPULATION INTERNATIONAL AIR PASSENGERS BY COUNTRY
(percentages of figures for same dates in 2019)
New cases per 100,000 New deaths per 100,000 % total population
inhabitants (14-day total) Percentage of levels in 2019
inhabitants (14-day total) 100
4,500 25 90
90 82.7
4,000 80
20 80 67.9
3,500 70 67.7
70 62.9
3,000 60
15 60 50
2,500
50 40
2,000
10 40 30
1,500
30 20
1,000 5 20 10
500
10 0
Nov-21
Apr-21
Mar-21
Jul-21
May-21
Jan-21
Jan-22
Oct-21
Feb-21
Feb-22
Dec-21
Sep-21
Aug-21
Jun-21
0 0 0
SPAIN FRANCE GERMANY FRANCE UNITED KINGDOM ITALY
14- DAY CUMULATIVE INCIDENCE
ITALY GERMANY
UNITED KINGDOM
14 DAY CUMULATIVE DEATHS (right hand scale)
SOURCES: Our World in Data and AENA.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 7IN THE FINAL STRETCH OF 2021 AND EARLY 2022, THERE WERE SIGNS OF MODERATION IN THE BOTTLENECKS.
THE WAR AND THE FRESH OUTBREAKS OF COVID-19 IN CHINA HAVE REVERSED THIS TREND
MARITIME TRANSPORT
COVID-19 at
SUPPLIERS’ DELIVERY TIMES INCIDENCE OF COVID-19 IN CHINA
End of Suez
z-scores Canal Chinese ports Index
blockage Daily new cases
5 70
8,000
4 60
7,000
3 50
More 6,000
2 congestion 40
5,000
1 30
4,000
0 20
3,000
-1 10 Increase in delivery times
-2 2,000
0
-3 1,000
ene.-21 abr.-21 jul.-21 oct.-21 ene.-22
0
2020 2021 2022
SPAIN GERMANY FRANCE ITALY
COMPOSITE INDICATOR OF MARITIME TRAFFIC
COMPOSITE INDICATOR OF TRANSPORT PRICES
SOURCES: IHS Markit, Johns Hopkins University and Banco de España.
a) An increase in the indicators denotes greater congestion in sea ports. The composite indicator of maritime traffic is the main component of the indicators of container traffic in the Suez Canal and of
wait times at four US and Chinese ports. The composite indicator of transport prices is the main component of prices of Baltic Dry Index, Harpex Global and container traffic between Asia and the
United States and between Asia and Europe.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 8COMMODITY PRICES REMAINED ON AN UPWARD PATH OVER THE QUARTER, SURGING AT THE START OF THE
ARMED CONFLICT IN UKRAINE, BUT MODERATING RECENTLY
OIL PRICES MIBGAS INDEX FOR SPAIN (a) COMMODITY PRICES (S&P)
$ per barrel €/MWh 04/01/21 = 100
150 250 260
140
230
130 200
120 200
150
110
170
100
100
90 140
80 50
110
70
60 0 80
TOTAL AGRICULTURE ENERGY METALS
SOURCES: Refinitiv and Mibgas.
(a) The MIBGAS index is the weighted average price for all gas transactions carried out on the same day at all the Trading Sessions for Spain.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 9IN RECENT MONTHS INFLATION HAS CONTINUED TO ACCELERATE, MAINLY OWING TO ENERGY AND FOOD, BUT
ALSO TO THE INCREASE IN UNDERLYING INFLATION
HEADLINE HICP UNDERLYING INFLATION MEASURES OVERALL INDEX EXCLUDING ENERGY AND FOOD
(percentage of items in each growth range)
% y-o-y and pp % y-o-y
10 4,0 %
9 3,5 100
8
3,0
7
2,5 80
6
5 2,0
4 60
1,5
3
2 1,0
1 40
0,5
0
0,0
-1 20
-2 -0,5
-3 -1,0
2019 2020 2021 2022 2019 2020 2021 2022 0
Jan-19
Apr-19
Oct-19
Jan-20
Apr-20
Oct-20
Jan-21
Apr-21
Oct-21
Jan-22
Jul-19
Jul-20
Jul-21
ENERGY (excl. electricity) ELECTRICITY HICP EXCL. ENERGY AND FOOD
UNDERLYING EXCL. TOURISM AND CLOTHING
HICP EXCL. ENERY AND FOOD FOOD TRIMMED MEAN AT 10%
HICP TRIMMED MEAN AT 30%
MEDIAN 4
SOURCES: INE, Eurostat and Banco de España. Latest observation: February 2022 (March 2022 flash estimate for the HICP).
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 10HIGH VOLATILITY IN THE FINANCIAL MARKETS, OWING TO THE WAR AND THE CHANGES IN EXPECTATIONS OF
THE MONETARY POLICY RESPONSE TO INFLATION, ALTHOUGH WITHOUT HIGHLY DISRUPTIVE EPISODES
STOCK MARKET INDICES SOVEREIGN SPREADS IN THE EURO AREA INTEREST RATES ON 10-YEAR SOVEREIGN DEBT
31.12.2021 = 100 pp %
104 180 2,4
Ukraine invasion
160
100 2,0
140
1,6
96 120
1,2
100
92
80 0,8
88 60 0,4
40
84 0,0
20
-0,4
80 0
Jan-21
Feb-21
Apr-21
Jul-21
Aug-21
Sep-21
Dec-21
Oct-21
Nov-21
Jan-22
Feb-22
Mar-21
Mar-22
Jun-21
May-21
Jan-22 Feb-22 Mar-22
-0,8
Dec-21
Apr-21
Jan-21
Feb-21
Jul-21
Aug-21
Sep-21
Nov-21
Oct-21
Jan-22
Feb-22
Mar-21
Mar-22
May-21
Jun-21
S&P 500 EURO STOXX 50 FTSE 250 IBEX 35
ITALY PORTUGAL FRANCE SPAIN
GERMANY UNITED STATES
SPAIN UNITED KINGDOM
SOURCE: Refinitiv Datastream. Latest observation: March 31.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 11FINANCING TERMS AND CONDITIONS TIGHTENED SLIGHTLY, IN A SETTING IN WHICH NEW LENDING TO
ENTERPRISES AND TO HOUSEHOLDS FOR HOUSE PURCHASE SHOWED GREATER MOMENTUM
FINANCING COSTS BLS: CHANGE IN CREDIT STANDARDS (a) NEW LENDING
% %
3,0 7,5 %
50
2019 average = 100
2,5 7,0 180
40
160
TIGHTENING
2,0 6,5
30
1,5 6,0 140
20
1,0 5,5 120
10
0,5 5,0 100
0 80
0,0 4,5
-10 60
-0,5 4,0
EASING
-20 40
-1,0 3,5
2019 2020 2021 2022
-30 20
HOUSE PURCHASE 2019 2020 2021 2022 2020 2021 2022
12M EURIBOR HOUSE PURCHASE HOUSE PURCHASE
NFCs, UP TO €1 MILLION FORECAST
CONSUMER CREDIT AND OTHER LENDING CONSUMER CREDIT
NFCs, OVER €1 MILLION FORECAST NFCs, UP TO €1 MILLION
LONG-TERM DEBT SECURITIES SMEs
FORECAST NFCs, OVER €1 MILLION
CONSUMER CREDIT (r-h scale) LARGE FIRMS SOLE PROPRIETORS
FORECAST
GROSS ISSUANCE OF DEBT SECURITIES
SOURCES: Banco de España and Refinitiv Datastream. Latest observation: February (financing costs and new lending), March (EURIBOR) and 2021 Q4 (credit standards).
a. Indicator = percentage of banks that have tightened their credit standards considerably × 1 + percentage of banks that have tightened their credit standards somewhat × 1/2 – percentage of banks that
have eased their credit standards somewhat × 1/2 – percentage of banks that have eased their credit standards considerably × 1.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 12THE WAR INTERRUPTED THE IMPROVEMENT OBSERVED AT THE BEGINNING OF THE QUARTER IN THE
CONFIDENCE INDICATORS
PURCHASING MANAGERS’ INDEXES CONFIDENCE INDICATORS
Index Index
Index
70 40 120
65 30 115
60
20 110
55
50 10 105
45
0 100
40
35 -10 95
30 -20 90
25
20 -30 85
15 -40 80
10
5 -50 75
0 -60 70
CONSUMERS
INDUSTRY
MANUFACTURING PMI. OUTPUT
SERVICES
SERVICES PMI. ACTIVITY
ECONOMIC SENTIMENT INDICATOR (r-h scale)
SOURCES: IHS Markit and European Commission.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 13EMPLOYMENT CONTINUED TO GROW IN Q1, ALTHOUGH AT A LOWER RATE THAN IN PREVIOUS QUARTERS
CHANGE IN TOTAL AND ACTUAL SOCIAL SECURITY REGISTRATIONS QUARTERLY CHANGE IN ACTUAL SOCIAL SECURITY
AND IN FURLOUGHED EMPLOYEES VERSUS FEBRUARY 2020 (a) REGISTRATIONS AND CONTRIBUTION OF TOTAL REGISTRATIONS
AND OF FURLOUGHED EMPLOYEES (a)
% %
5 3,0
0 2,5
-5 2,0
-10 1,5
-15 1,0
-20 0,5
-25 0,0
Aug-20
Sep-20
Dec-20
Aug-21
Sep-21
Dec-21
Mar-20
Feb-21
Mar-21
Feb-22
Mar-22
Jun-20
Jun-21
May-20
May-21
Nov-20
Nov-21
Jan-21
Jan-22
Apr-20
Jul-20
Oct-20
Apr-21
Jul-21
Oct-21 -0,5
2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1
FURLOUGHED EMPLOYEES (ERTE)
FURLOUGHED EMPLOYEES (ERTE)
TOTAL SOCIAL SECURITY REGISTRATIONS
TOTAL SOCIAL SECURITY REGISTRATIONS
EFFECTIVE SOCIAL SECURITY REGISTRATIONS
EFFECTIVE SOCIAL SECURITY REGISTRATIONS
SOURCES: Ministerio de Inclusión, Seguridad Social y Migraciones and Banco de España. Latest observation: March 2022.
a) Seasonally adjusted series.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 14FIRMS EXPECTED THEIR TURNOVER TO SHRINK IN 2022 Q1
TURNOVER. QUARTERLY CHANGE (a) EMPLOYMENT. QUARTERLY CHANGE (a)
0,4 0,4
0,3 0,3
0,2 0,2
0,1 0,1
0,0 0,0
-0,1 -0,1
-0,2 -0,2
-0,3 -0,3
-0,4 -0,4
-0,5 -0,5
-0,6 -0,6
2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1
Nov-20 wave Feb-21 wave May-21 Aug-21 waveNov-21 wave Feb/Mar-22 Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb/Mar-22
wave wave wave wave wave wave wave wave
SOURCE: Banco de España (EBAE).
a) Index calculated as steep decrease = -2, slight decrease = -1, stable = 0, slight increase = 1, steep increase = 2.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 15GDP GROWTH FORECAST FOR Q1
QUARTER-ON-QUARTER GDP GROWTH (%)
%
3,0
2,6
2,5
2,2
2,0
1,5
1,1
1,0 0,9
0,5
0,0
-0,5
-0,5
-1,0
2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1
SOURCES: Banco de España and INE.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 16CONTENTS
1. Overview
2. Developments in economic activity in the short term
3. Projections for the Spanish economy for 2022-2024
4. Main risks and sensitivity exercises
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 17THE ARMED CONFLICT IN UKRAINE AFFECTS THE OUTLOOK FOR GROWTH AND INFLATION, THROUGH VARIOUS
CHANNELS
• Increase in the price of these inputs and higher consumer price inflation
Commodities channel
• Possible supply problems
• Deterioration in global economic outlook
Trade channel
• Worsening of global value chain bottlenecks
• Postponement of consumption and investment decisions of households
Confidence/uncertainty channel and firms
• Tightening of financing conditions
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 18COMMODITIES CHANNEL: ALTHOUGH SPAIN’S RELIANCE ON RUSSIAN ENERGY IS NOT HIGH, IT HAS ALWAYS
BEEN PARTICULARLY VULNERABLE TO ENERGY SHOCKS
CHANGES IN PURCHASING POWER OWING TO
CHANGES IN ENERGY PRICES (b)
%
2
1
0
-1
-2
-3
-4
-5
Mar-19
Mar-20
Mar-21
May-19
May-20
May-21
Sep-19
Sep-20
Sep-21
Jan-19
Jan-20
Jan-21
Jan-22
Nov-19
Nov-20
Nov-21
Jul-19
Jul-20
Jul-21
EURO AREA SPAIN
SOURCES: INE, Eurostat and Banco de España.
a) Simulations based on the NiGEM model with rational expectations and exogenous monetary policy.
b) The indicator proxies the change in households’ purchasing power stemming from changes in the price of energy if their gross disposable income were to grow at the same pace as the HICP.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 19TRADE CHANNEL: SPAIN’S DIRECT EXPOSURE TO RUSSIA IS MODEST, BUT GLOBAL ECONOMIC ACTIVITY IS
ALREADY HIGHLY INTERCONNECTED. POSSIBLE WORSENING OF BOTTLENECKS
EURO AREA GDP GROWTH FORECASTS
WORLD GDP GROWTH FORECASTS
SOURCES: ECB, European Commission, IMF, Consensus Forecast and Banco de España (EBAE).
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 20CONFIDENCE/UNCERTAINTY CHANNEL: CONFIDENCE AND UNCERTAINTY INDICATORS HAVE DETERIORATED
SINCE THE START OF THE WAR, WHICH NORMALLY HAMPERS GROWTH
DENSI (CONFIDENCE) EPU (UNCERTAINTY) CONSUMER CONFIDENCE AND GDP
change change
0.0 1.8 Index %
10 10
1.6
8
-0.5 1.4 0 6
1.2 -10 4
-1.0 2
1.0
-20 0
0.8 -2
-1.5 -30
0.6 -4
0.4 -40 -6
-2.0
-8
0.2
-50 -10
ene-10
jul-10
ene-11
jul-11
ene-12
jul-12
ene-13
jul-13
ene-14
jul-14
ene-15
jul-15
ene-16
jul-16
ene-17
jul-17
ene-18
jul-18
ene-19
jul-19
ene-20
jul-20
ene-21
jul-21
ene-22
-2.5 0.0
-0.2
-3.0 -0.4
1 7 13 19 25 31 37 43 49 1 7 13 19 25 31 37 43 49 GDP. YEAR-ON-YEAR RATES (right-hand scale)
days since the start of each crisis days since the start of each crisis CONSUMER CONFIDENCE
UKRAINE CRISIS FINANCIAL CRISIS DEBT CRISIS COVID-19 CRISIS
SOURCES: Banco de España, GPR, EPU, Refinitiv, Factiva, INE and European Commission.
The DENSI and EPU indicators are built on the “economic sentiment” and “economic policy uncertainty” contained in articles published in the main Spanish newspapers. The DENSI takes into account the
difference between the number of articles containing terms that may be associated with a potential improvement and that referring to a potential worsening of economic activity in the short term, while the
EPU is based on the number of articles about the uncertainty surrounding economic policies.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 21THE WAR IN UKRAINE HAS UNLEASHED A NEW NEGATIVE SHOCK WHILE WE HAVE YET TO COMPLETE THE
RECOVERY FOLLOWING THE HEALTH CRISIS…
REAL GDP PERCENTAGE OF VULNERABLE FIRMS BASED ON THE NET DEBT / (GROSS
OPERATING PROFIT + FINANCIAL REVENUE) RATIO (a) (b)
2019 Q4 = 100 %
35
105
30
100 100,2
25
96,2
95
20
90
15
85
10
80 5
75 0
Dec-19 Dec-20 Dec-21 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021
Total firms Sectors severely Sectors moderately Sectors largely
EURO AREA GERMANY FRANCE ITALY SPAIN affected by the health affected by the health unaffected by the
crisis crisis health crisis
SOURCES: INE and Banco de España.
a. The most vulnerable firms are defined as those whose Net financial debt / (Gross operating profit + Financial revenue) ratio is greater than 10 or which have positive net financial debt and zero or
negative earnings.
b. Sectors are defined as severely affected by the COVID-19 crisis if their sales fell by more than 15% in 2020; as moderately affected if their sales fell between 9% and 15%; other sectors are deemed to
be largely unaffected.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 22-1,6
-1,2
-0,8
-0,4
-2,0
0,0
0,4
0,8
1,2
1,6
2,0
%
Land transport
Fishing and aquaculture
Air transport
Manuf. of motor vehicles
Water transport
Wood and cork
Food, bev. and tob.
SOURCES: INE and Banco de España.
Pharmaceutical products
Electrical equipment
Construction
Agriculture
Accomm. and food serv. act.
Paper and graphic arts
DEVIATION FROM NOMINAL GVA IN 2023
Other non-metalic min.
Rubber and plastics
Water, sew., waste man.
Telecommunications
Other transport equipment
Arts, ent. and rec.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA
Furn., rep. of mach. and equip.
Public admin. and defence
Trade; rep. of motor veh.
Computer prog. and related act.
Health and social work
Publishing; cin., TV and radio
Metal prod, exc. mach. and equip
Comp., electr. and opt. prod.
a) Sectors severely affected by the COVID-19 crisis are defined as those whose turnover fell by more than 15% in 2020.
…. AND WILL AGAIN HAVE A HIGHLY UNEVEN IMPACT BY SECTOR
Manuf. of mach. and equip.
Prof. Sci. and tech. act.
Stor. and support act. for transp.
Other services
Admin. act. and anc. serv.
IMPACT OF A 25% INCREASE IN ENERGY PRICES ON NOMINAL GVA IN 2023
Education
Textiles, leather and footwear
Postal and courier act.
Financial and insurance serv.
Real estate act.
Mining of metal ores
Metallurgy
DEVIATION FROM NOMINAL GVA IN 2023 AND SECTOR SEVERELY AFFECTED BY COVID-19 (a)
Chemicals industry
Coke and refined petroleum
Mining support services
Elect., gas, steam, a/c supply
%
Extract. of petr. and natural gas
Right-hand scale
0
4
8
-8
-4
12
16
20
-16
-12
-20
23MACROECONOMIC PROJECTIONS 2022-2024
APRIL 2022 DIFFERENCE VIS-À-VIS
PROJECTIONS (a) DECEMBER PROJECTIONS
Annual rate of change (%), unless otherwise indicated 2020 2021 2022 2023 2024 2022 2023 2024
GDP -10.8 5.1 4.5 2.9 2.5 -0.9 -1.0 0.7
Harmonised index of consumer prices (HICP) -0.3 3.0 7.5 2.0 1.6 3.8 0.8 0.0
HICP excluding energy and food 0.5 0.6 2.8 1.8 1.7 1.0 0.4 0.1
Unemployment rate (% of labour force). Annual average 15.5 14.8 13.5 13.2 12.8 -0.7 0.3 0.4
General government net lending (+)/net borrowing (-) (% of GDP) -10.3 -6.9 -5.0 -5.2 -4.7 -0.2 -1.2 -1.4
General government debt (% of GDP) 120.0 118.4 112.6 112.8 113.5 -3.1 -0.9 0.0
SOURCES: Banco de España and INE.
a) Projections cut-off date: 31 March 2022.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 24GDP GROWTH IS REVISED DOWN IN 2022 AND 2023, AND UP IN 2024
GROSS DOMESTIC PRODUCT In the baseline scenario, under which there is no
(chained volume index)
2019 Q4 = 100 escalation in the armed conflict in Ukraine, the
110 war would have its largest adverse impact on
105
activity in Q2
100
95
The conflict does not prompt an appreciable
90 deterioration of potential growth: at the end of
the projections horizon, economic growth stands
85
at similar rates to those forecast in December
80
75
2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 Q4 2024 Q44
The Spanish economy’s return to pre-pandemic
APRIL 2022 DECEMBER 2021 TREND DECEMBER 2019 GDP levels is pushed back to 2023 Q3
SOURCES: Banco de España and INE.
Latest observation: 2021 Q4.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 25FACTORS BEHIND THE REVISION OF THE GDP GROWTH PATH
CHANGES IN THE GDP FORECAST IN 2022
% y-o-y and pp 2021 2022 2023 2024 % and pp
8
December 2021 forecast 4.5 5.4 3.9 1.8
7
0,2
New National Accounts data 0.6 0.8 0.0 0.0 6 0,7
0,8 6,2
5,7 0,6
5 5,4 5,4 0,5
Fiscal measures 0.0 0.2 -0.2 0.0 5,2 0,2
4 4,7 4,5 4,5
External markets and bottlenecks 0.0 -0.5 -0.3 0.1
3
Energy and inflation dynamics 0.0 -0.7 -0.7 0.5 2
Confidence and uncertainty 0.0 -0.6 0.1 0.1 1
0
Financial factors and other elements 0.0 -0.2 0.2 0.1
Accounts data
and uncertainty
December 2021
April 2022
Fiscal measures
External markets
and other elements
inflation dynamics
and bottlenecks
New National
forecast
Financial factors
Confidence
Energy and
forecast
April 2022 forecast 5.1 4.5 2.9 2.5
SOURCE: Banco de España.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 26A VERY SIGNIFICANT PORTION OF THIS GROWTH MUST BE DRIVEN BY IMPLEMENTATION OF INVESTMENT
PROJECTS UNDER THE NGEU PROGRAMME
CUMULATIVE VOLUME OF PUBLISHED RRF TENDERS (a) NGEU SPENDING ASSUMPTIONS EFFECT OF NGEU ON GDP LEVEL
(b) (RRF AND REACT-EU)
€m €m % deviation vs counterfactual
25.000 30000 2,0
25000
20.000
1,5
20000
15.000
15000 1,0
10.000
10000
0,5
5.000
5000
0 0 0,0
2021 2022 2023 2024 2021 2022 2023 2024
2,0
1,5
1,0
Tender start date 0,5
0,0
BANCO DE ESPAÑA -Dec.21 BANCO DE ESPAÑA - Apr.22
2021 2022 2023 2024
25.000 END DATE AFTER 2022
€m
-25.000 END DATE DURING 2022
END DATE DURING 2021
Tender start date
SOURCES: https://planderecuperacion.gob.es, 2022 Budgetary Plan, 2021-2024 Draft Budget, IGAE and Banco de España.
(a) Not including tenders in “forthcoming” status, those agreed without being publicised, those relating to Government guarantees or those identified as REACT-EU.
(b) Tenders published on the RTRP website to 29/03/2022 and on a cumulative monthly basis.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 27INFLATION IS REVISED UP SHARPLY IN 2022, BUT IS PROJECTED TO MODERATE GRADUALLY OVER THE MEDIUM
TERM
HEADLINE HICP HICP EXCLUDING FOOD AND ENERGY
% y-o-y % y-o-y
10,0 3,5
3,0
8,0
2,5
6,0 2,0
1,5
4,0
1,0
2,0 0,5
0,0
0,0
-0,5
-2,0 -1,0
2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024
20,0
0,0
-20,0 APRIL 2022 DECEMBER 2021
SOURCES: Banco de España and INE.
Latest observation: February 2022.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 28MEASURES APPROVED IN ROYAL DECREE-LAW 6/2022 OF 29 MARCH 2022 DIRECTLY AFFECTING INFLATION
An extraordinary and temporary rebate (between 1 April and 30 June 2022) on the retail price of fuel
A 36% reduction in energy system-related charges with respect to March (55% with respect to August 2021) until 31
December 2022
An extension until 30 June 2022 of the suspension of the tax on electricity generation and of the reduced rates for
VAT on electricity (10%) and the excise duty on electricity (0,5%)
An extension of the cap on the April and July 2022 revisions of the regulated rate for small natural gas consumers (to
a maximum increase of 5% for retail consumers)
A 2% cap on rent increases from 1 April to 30 June
A reduction of between 0.5 pp and 0.8 pp in the average inflation rate for 2022 (compared with a scenario of
no measures)
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 29HOUSEHOLDS ARE EXPECTED TO RESORT TO A GREATER EXTENT TO THEIR ACCUMULATED SAVINGS, BUT
THIS WILL NOT PREVENT A SLOWER RECOVERY IN REAL CONSUMPTION OWING TO HIGH INFLATION
PRIVATE CONSUMPTION SAVING RATE
(volume chain-linked index)
% of GDI (a)
2019 Q4 = 100
16
110
105
14
100
12
95
90 10
85
8
80
6
75
70 4
2019 Q4 2020 Q4 2021 Q4 2022 Q4 2023 Q4 2024 Q4 2019 2020 2021 2022 2023 2024
24
APRIL
4 2022 DECEMBER 2021 2015-2019 AVERAGE
2019 2020 2021 2022 2023 2024
SOURCES: Banco de España and INE.
Latest observation: 2021 Q4.
a) Gross disposable income.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 30IN 2021 THE GENERAL GOVERNMENT BUDGET BALANCE WAS BETTER THAN EXPECTED DUE TO SOUND
REVENUE PERFORMANCE, BUT IT IS REVISED DOWN FOR 2022-2024
GENERAL GOVERNMENT BALANCE GENERAL GOVERNMENT REVENUE AND CHANGES IN THE PUBLIC DEFICIT FORECAST
EXPENSES (a) FOR 2022 SINCE DECEMBER
% of GDP
% y-o-y % of GDP
-2 20 5,1
5,0
15
-4 4,9
10 4,8
-6 0,6
4,7
5 0,3
4,6
-8 5,0
0 4,5
4,8 0,1
4,4
-10
-5
4,3
4,4
4,2
-12 -10
2019 2020 2021 2022 2023 2024 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22
4,1
Dec. 2021 close Macro Measures Apr.
Forecast Forecast
DECEMBER 2021 APRIL 2022 APE 2021-24 REVENUE EXPENSES
SOURCES: SPU 2021-2024, IGAE and Banco de España.
a) Relating to the general government aggregate, excluding local government and transfers between tiers of government.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 31CONTENTS
1. Overview
2. Developments in economic activity in the short term
3. Projections for the Spanish economy for 2022-2024
4. Main risks and sensitivity exercises
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 32AN EXTRAORDINARILY UNCERTAIN SCENARIO: MAIN SOURCES OF UNCERTAINTY
Duration and severity of the
war in Ukraine and persistence Indirect and second-round Take-up and economic impact
of the possible geopolitical effects on inflation of the European NGEU funds
fall-out
Energy prices Household consumption and
Course of the pandemic
recourse to stock of savings
Impact of worldwide monetary
Possible energy and fiscal
Bottlenecks in global policy normalisation on
policy measures in Spain and
production and supply chains financial markets and financing
the European Union
conditions
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 33IN SUCH AN UNCERTAIN SETTING, SEVERAL HYPOTHETICAL SCENARIOS ARE CONSIDERED THAT ILLUSTRATE
THE CONSIDERABLE SENSITIVITY OF THE PROJECTIONS TO VARIOUS KEY ASSUMPTIONS
SENSITIVITY EXERCISES CAUTIONS
What if the high energy prices prove more • The counterfactual scenarios considered
persistent than expected? include assumptions which, albeit plausible, are
less likely to arise than those envisaged in the
baseline scenario
What if trade with Russia is suspended?
• The estimated impacts should be interpreted
with caution, as it is not possible to accurately
assess the economic response to relatively
extreme assumptions
What if significant second-round effects
arise?
• The sensitivity exercises considered are
interconnected, so the impacts are not
What if household consumption is more cumulative
buoyant?
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 34WHAT IF THE HIGH ENERGY PRICES PROVE MORE PERSISTENT?
A future energy price trajectory is considered that holds steady around the highest level recorded since the
start of the war in Ukraine (observed in mid-March)
ENERGY PRICE SHOCK (INCREASE COMPARED DIFFERENCES VIS-À-VIS THE BASELINE SCENARIO (IN PP)
WITH FEBRUARY 2020)
INFLATION GDP
%
80
0,5 0,0
70
60
0,4 -0,1
50
40 0,3 -0,2
30
20 0,2 -0,3
10
0,1 -0,4
0
2021 Q1 2022 Q1 2023 Q1 2024 Q1
0,0 -0,5
BASELINE
CENTER SCENARIO
STAGE ADVERSE STAGE
ADVERSE SCENARIO 2022 2023 2024 2022 2023 2024
SOURCES: Banco de España and INE.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 35WHAT IF TRADE WITH RUSSIA IS SUSPENDED?
The suspension of all bilateral trade between Russia and the European Union, including trade in energy
commodities, is considered
DIFFERENCES VIS-À-VIS THE BASELINE SCENARIO in 2022 (IN PP)
IMPACT ON GDP IMPACT ON INFLATION
pp pp
0,0 1,6
-0,2 1,4
1,2
-0,4
1,0
-0,6
0,8
-0,8
0,6
-1,0
0,4
-1,2 0,2
-1,4 0,0
Low substitutability Medium High substitutability Low substitutability Medium substitutability High substitutability
substitutability
SOURCE: Banco de España.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 36WHAT IF SIGNIFICANT SECOND-ROUND EFFECTS ARISE? (1/3)
So far, wage settlements have increased only slightly, so workers are losing purchasing power
WAGE RISES AND WORKERS AFFECTED IN 2022
WAGE RISES BY DATE OF SIGNING OF AGREEMENT INFLATION INDEXATION CLAUSES
Persons % total % y-o-y
3,0 % 1.200.000 80 7
70 6
2,5 1.000.000
5
60
2,0 800.000 4
50
3
1,5 600.000 40
2
30
1,0 400.000 1
20
0
0,5 200.000
10 -1
0,0 0 0 -2
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2015 2016 2017 2018 2019 2020 2021 2022 2020 2020 2020 2020 2021 2021 2021 2021 2022
(to Feb) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
INDEXATION CLAUSES CPI (Dec t-1) (right-hand scale)
TOTAL REVISED NEW 0%-2% 2%-3% 3%-5% >5%
SOURCES: Ministerio de Trabajo y Economía Social and Banco de España.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 37WHAT IF SIGNIFICANT SECOND-ROUND EFFECTS ARISE? (2/3)
For the time being, firms do not appear to be fully passing their rising input costs through to the price of their
products: profit margins are narrowing
CHANGES IN FIRMS’ TRADE MARGINS IN 2021 Q4 (b) SHARE OF EMPLOYMENT OF FIRMS WITH
Difference with respect to 2020 Q4 NEGATIVE PROFITABILITY (c)
QUARTERLY EVOLUTION OF PRICES pp % pp
1,4 2 35 14
1,2
1 30 12
1,0
0 25 10
0,8
0,6 -1 20 8
0,4 -2 15 6
0,2
-3 10 4
0,0
-4 5 2
-0,2
-0,4 -5 0 0
2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 Total Of which:Of which: 2019 2020 2021 2022 2023
industry Minerals Other
Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb/mar-22 and manufac.
round round round round round round metals industries IMPACT OF COVID-19. Change in 2020 (right-hand scale)
Total Industry Trade Information Other
IMPACT OF RISING ENERGY PRICES (right-hand scale)
PRICE OF INPUTS PRICE OF OUTPUTS firms and hospitality and
comms
DECEMBER 2021 SCENARIO
SOURCE: Banco de España (EBAE and CBQ). DECEMBER 2021 SCENARIO, WITH RISING ENERGY PRICES
a) Index calculated as Significant decrease = -2; Slight decrease = -1; Stability = 0; Slight increase = 1; Significant increase = 2
b) The trade margin is defined as the ratio of GVA to output.
c) 2019 employment. A 22% rise in energy prices has been assumed for 2022, with an additional 3% in 2023.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 38WHAT IF SIGNIFICANT SECOND-ROUND EFFECTS ARISE? (3/3)
Meanwhile, a scenario is envisaged in which business owners and workers look to increase their prices and
wages in order to neutralise the initial impact of the energy shock on their income, triggering second-round
effects on prices and wages
DIFFERENCES WITH RESPECT TO THE BASELINE SCENARIO (IN PP)
HICP GDP EMPLOYMENT
3,0 0,0 0,0
-0,2 -0,2
2,0
-0,4 -0,4
1,0
-0,6 -0,6
0,0 -0,8 -0,8
2022 2023 2024 2022 2023 2024 2022 2023 2024
SOURCES: Banco de España and INE
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 39WHAT IS HOUSEHOLD CONSUMPTION IS MORE BUOYANT?
In 2022-2024, a scenario has been envisaged in which households may use two thirds of the savings they
have built up since the onset of the pandemic (only one third in the baseline scenario)
DIFFERENCES WITH RESPECT TO THE BASELINE SCENARIO (IN PP)
SAVINGS RATE GDP EMPLOYMENT
0,0 0,5 0,5
-0,2
0,4 0,4
-0,4
0,3 0,3
-0,6
0,2 0,2
-0,8
0,1 0,1
-1,0
-1,2 0,0 0,0
2022 2023 2024 2022 2023 2024 2022 2023 2024
SOURCES: Banco de España and INE
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 40APPENDIX DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 41
ASSUMPTIONS ON THE INTERNATIONAL ENVIRONMENT AND MONETARY AND FINANCIAL CONDITIONS
SOURCES: Banco de España and ECB.
a. Cut-off date for assumptions: 31 March 2022. The figures expressed as levels are annual averages. The figures expressed as rates are calculated based on the relevant annual averages.
b. The differences are expressed as rates for euro area GDP, as levels for electricity and oil prices and the $/€ exchange rate, as percentages for the effective nominal exchange rate and as percentage points for interest rates.
c. Obtained from the ECB staff macroeconomic projections for the euro area, March 2022.
d. Regulated rate for small electricity consumers.
e. A positive percentage change in the nominal effective exchange rate denotes an appreciation of the euro.
f. For the projection period, the figures in the table are technical assumptions, prepared following the Eurosystem's methodology. These assumptions are based on futures market prices or approximations thereto, and should not be
interpreted as a Eurosystem prediction as to how these variables will trend.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 42MACROECONOMIC PROJECTIONS (2022-2024)
December 2021
April 2022 projections (a)
projections
2020 2021 2022 2023 2024 2022 2023 2024
GDP -10.8 5.1 4.5 2.9 2.5 5.4 3.9 1.8
Private consumption -12.0 4.6 4.5 3.9 2.4 5.1 5.2 2.2
Government consumption 3.3 3.1 -0.3 0.8 1.2 -0.2 0.7 1.5
Gross fixed capital formation -9.5 4.3 4.5 2.1 2.5 7.8 3.7 2.1
Exports of goods and services -20.1 14.7 12.0 3.8 3.7 9.1 4.6 3.1
Imports of goods and services -15.2 13.9 9.0 3.3 2.9 6.5 4.8 3.7
Domestic demand (contribution to growth) -8.6 4.6 3.3 2.7 2.1 4.4 3.9 1.9
Net external demand (contribution to growth) -2.2 0.5 1.2 0.2 0.4 1.0 0.0 -0.1
Nominal GDP -9.8 7.4 9.1 4.8 4.3 8.1 5.6 3.6
GDP deflator 1.1 2.2 4.4 1.9 1.7 2.5 1.7 1.7
Harmonised index of consumer prices (HICP) -0.3 3.0 7.5 2.0 1.6 3.7 1.2 1.5
HICP excluding energy and food 0.5 0.6 2.8 1.8 1.7 1.8 1.4 1.6
Employment (hours) -10.6 7.0 1.9 2.0 1.6 3.8 2.8 1.3
Unemployment rate (% of labour force).
15.5 14.8 13.5 13.2 12.8 14.2 12.9 12.4
Annual average
Net lending (+)/net borrowing (-) of the nation (% of GDP) 1.2 1.9 2.7 3.3 3.2 2.9 2.7 2.1
General government net lending (+)/net borrowing (-) (% of GDP) -10.3 -6.9 -5.0 -5.2 -4.7 -4.8 -4.0 -3.4
General government debt (% of GDP) 120.0 118.4 112.6 112.8 113.5 115.7 113.7 113.5
SOURCES: Banco de España and INE. Latest QNA data published: 2021 Q4
a) Projections cut-off date: 31 March 2022.
DIRECTORATE GENERAL ECONOMICS, STATISTICS AND RESEARCH – BANCO DE ESPAÑA 43You can also read
