The biggest negative impact of trade bottlenecks and the fatal supply crisis will come in the coming year. The Bank of Spain calculates that it can scratch up to nine tenths of GDP in 2022, around 11,000 million euros. More than 80% of Spanish companies also expect that they will receive the biggest hit during the next year.
, 2022 may be even tougher. According to the Bank of Spain’s analysis, the greatest impact of the supply crisis will occur throughout 2022. For the institution this year the negative consequences will barely amount to 0.3% of GDP, some 3,700 million. The blow for next year may exceed 11,000 million, assuming between 0.5% and 0.9%, as the negative effects are amplified.
The economists from the Bank of Spain take into account what the negative impact implies for the industry, but also the drag effect caused by the supply crisis for the national economy and the subtraction from lower international demand.
The institution underlines the “important disruptions” in global supply chains that have occurred in recent quarters and that “have conditioned the degree of dynamism of the recovery of activity in the main world economies.”
“A peculiarity of these bottlenecks is that they have affected the different branches of activity in a very heterogeneous way and have had a particularly important incidence in those industries located in the highest parts of the value chain, that is, in those that supply goods that are used by other industries,” he says.
Thus, for example, he explains that the “strong imbalances” between supply and demand that have been occurring recently in the semiconductor and integrated circuit industry have had “a very significant negative impact” in the automobile sector, where many manufacturers have been forced to paralyze or cut back on their production plans.
The Bank of Spain points out that most of the adverse effect on Spanish GDP of these bottlenecks would be associated with the negative impact that these disturbances have on the automobile sector. This, he adds, “is consistent with the high weight and relevance of this sector” in the Spanish economy. More than half of the negative impact in 2022 corresponds to the automotive sector.
The Bank of Spain has assumed that the duration of these disturbances in the supply chains will continue mainly during the fourth quarter of 2021 and the first three quarters of next year. But he cautions that there is “remarkable uncertainty” about how persistent these bottlenecks might be in the future.
Most Spanish companies think that the hardest part is yet to come. More than 60% of the Bank of Spain Survey on Business Activity (EBAE) believe that the supply crisis will be worse in 2022.
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