Will Spain’s Economy Recover in 2022?

The government expects the economy to return to pre-pandemic levels by 2022.


Spain needs to earn 49 billion euros in 2022 to return to 2019 GDP, as the government maintains its economic roadmap. On Tuesday, the Council of Ministers left its growth forecasts for the Spanish economy unchanged for this year and next.

It estimates that GDP will grow by 6.5% in 2021 and 7% in 2022, in line with the latest projections. The first vice-president and minister for the economy, Nadia Calviño, has noted the strength of the economic recovery following the end of the state of alarm and the lifting of the main measures restricting mobility despite the fifth wave and the spread of the delta variant.

According to Nadia, in 2022 Spain will recover its pre-pandemic activity and in 2023 it will be able to recover the growth path we had before the health crisis”, she remarked during her appearance before the media after the Council of Ministers.

The increase in the unemployment rate that occurred in Spain in 2020 due to the pandemic has been reduced by more than a third so far and the improvement should continue. By the end of next year, this percentage will still be six-tenths of a percentage point higher than the pre-crisis level before the pandemic.

In its annual Employment Outlook report published on Wednesday, the Organisation for Economic Co-operation and Development (OECD) points out that this increase will not be very different from the average for member countries, with unemployment 0.4 points higher than it was at the end of 2019.

The problem is that for many years the unemployment rate in Spain has been between 2.5 and 3 times higher than in the OECD (15.4 % last May, compared with 6.6 %).

The wounds left on the Spanish labour market are also evident in the employment rate, which fell from 63.5 % before the effects of covid were felt to 61.1 % at the end of 2020, and will not recover until 2023.

View of the Bank of Spain headquarters (Madrid) from Plaza de Cibeles (square).

Workers in ERTE

The use of ERTEs in Spain (20.5% of workers at the peak in April-May 2020) was similar in relative terms to that in OECD countries as a whole (19.9%).

Its coverage fell to 6.5 % in February-March 2021 in the organisation as a whole – where it is estimated to have saved up to 21 million jobs – and to 5.4 % in Spain.

The authors of the report note that in 2020 the budget for active employment policies was reduced by 14% to finance the expansion of ERTE and unemployment benefits, while it will increase by 35% in 2021.

They insist that additional investments in active labour market policies and public employment services are “essential” to help large numbers of unemployed to move from declining to growing sectors.

Also to help firms retain and recruit staff and provide intensive individual support to “particularly vulnerable people”.




The Government Expects the Economy to Return to Pre-Pandemic COVID-19 Levels by 2022

The Government has agreed on a non-financial spending limit for the year 2022 of 196,142 million euros, which is the highest figure in history in the allocation of resources for the next General State Budget, as highlighted by the Minister of Finance and Public Administration, María Jesús Montero.

This step is fundamental in the processing of the draft budget bill, together with the publication, on 28 June, of the Ministerial Order that dictates the rules for its preparation.

Montero stated that the objectives of the public accounts for 2022 are the consolidation of the economic recovery and the safeguarding of the welfare state, “key to expanding the middle class, which is the true driving force of our country”. The minister pointed out that the government is committed to building a stronger, fairer and more productive Spain “among all of us”.

In this regard, the Minister for Territorial Policy and Government spokesperson, Isabel Rodríguez, expressed her confidence that the opposition groups will support these objectives in the parliamentary process: “Agreement is a value, understanding generates wealth, creates employment, and this is a maxim that we should all incorporate to work on this path of dialogue that will undoubtedly contribute to our country”.


Maria Jesus Montero


Who Are Most Affected by the Pandemic?

Studies have shown that the crisis has particularly affected workers in low-paid jobs and on temporary contracts, people with low levels of education, and young people.

In the case of the latter, the unemployment rate among the 15-24 age group increased by more than 10 percentage points in the first four months of the pandemic (more than three times higher than among the general population), reaching 42%.

Within this group, the hardest hit young people were those who entered the labour market at the height of the crisis when there was very little hiring. In May 2021, youth unemployment remained at a very high level of 36.9%.


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