The arrival of the recovery fund has been long awaited, and rightly so. Because the transfers of the instrument approved by the leaders last summer, and which will probably begin to arrive from July, will propel our country out of the crisis caused by covid-19, and will push our economy until it is the one that grows the most among European ones.
As elEconomista announced on Tuesday, the European Commission has improved its growth forecasts for Spain to 5.9% this year and 6.8% next year. The strong rebound expected from the second quarter of 2021 should allow Spanish GDP to return to its pre-pandemic level at the end of 2022, “the Commission says in its latest spring projections, published this Wednesday.
The Community Executive stresses that the implementation of our Recovery and Resilience Plan “will play an important role” in this economic expansion, particularly in 2022. In addition, the end of the restrictions will also encourage domestic consumption and tourism, therefore that the contribution of external demand will also be strong.
Followed by France and ahead of Greece
Thanks to the alignment of all these factors, our economy will become detached from the rest of the European ones. It will be the one that will grow the most this year, followed by France (5.7%), and also the next, ahead of Greece (6%).
The recovery will also gain momentum for the EU as a whole this year, with 4.2%, and next year, with 4.4%. The Commission has also improved its growth figures for the euro area for this year (4.3%) and for the next (4.4%).
The Commission emphasizes that the launch of the fund in our country will play “a decisive role” in our launch during the next two years. In absolute figures, Spain will be the country that will receive the most non-refundable aid from the new instrument: 69,500 million euros. The first transfer, around 9,000 million, could arrive at the end of July, while a second payment could take place towards the end of this year.
“If implemented efficiently, with its combination of strategic projects accompanied by extensive reforms, the economic impact will be significant, particularly in 2022, when strong demand effects would be accompanied by a gradual contribution from the supply side,” he says the institution.
“As with the recession in 2020, the recovery is also expected to remain uneven across all sectors.”
The Commission also hopes that the absorption of the funds will serve to attract private investment. But the gradual take-off from this second quarter will not benefit everyone equally. The Commission notes that “as with the recession in 2020, the recovery is also expected to remain uneven across sectors.” While the industry is already recovering, tourism and leisure activities continue to be penalized by the restrictions.
In addition, Brussels warns that the good Spanish forecasts “are still subject to a higher degree of uncertainty than normal”, due to questions about the improvement of the tourism sector, the behavior of consumers when restrictions are lifted, “the size or impact “of own restrictions to contain the virus from now on, and the absorption of recovery funds.
Thanks to European aid, our country will also be able to contain unemployment and begin to clean up public accounts. Brussels expects unemployment to rise slightly to 15.7%, then to start falling in 2022 to around 14.4%.
After debt has skyrocketed 25 points due to the impact of the virus to 120% last year, it will gradually begin to fall to 119.6% this year and 116.9% next year. The Commission also improves its forecast for our deficit, which will still remain at high levels this year (7.6%) and next year (5.2%).
Among the warnings, the Community Executive points out that the fall in profits could lead to business insolvencies, which poses a risk to our production and employment.