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Spain maintains GDP growth forecasts for 2021 and 2022 - minister - Metro US

Spain maintains GDP growth forecasts for 2021 and 2022 – minister

A woman opens a shop at a commercial district in Madrid

MADRID (Reuters) -Spain maintains its economic growth forecast for this year at 6.5% as it was set in April, Economy Minister Nadia Calvino said on Tuesday.

The economy is likely to expand 7% in 2022, when it is expected to reach pre-pandemic levels, Calvino told a news conference.

“All indicators and forecasts signal a strong recovery in the second half of the year,” she said.

The economy likely expanded more than 2% in the second quarter compared with the prior three months, Calvino added.

The forecasts hinge on the progress of the coronavirus vaccination program and the arrival of European Union recovery funds, she said.

The recovery in Spain, where the economy contracted 11% in 2020 as a result of the consequences of the pandemic, will buoy employment, Calvino said. “If growth is sustained over the summer, we could be near February 2020 employment levels during autumn,” she said.

The government expects unemployment to remain at 15% this year and 14% in 2022. The quarterly unemployment rate stood at 13.8% in late 2019, before the pandemic hit.

The government also maintained the budget deficit this year and in 2022 at 8.4% and 5%, respectively, Budget Minister Maria Jesus Montero said, as the current suspension of the fiscal straightjacket rules that set a 3% budget gap limit on EU member countries will also be in place for 2022.

Montero said the spending ceiling will be a record 196.14 billion euros ($231.80 billion) for 2022, slightly more than this year.

($1 = 0.8462 euro)

(Reporting by Emma Pinedo; Editing by Inti Landauro and Mike Harrison)

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