The Spanish economy grew in 2021 at its fastest rate since 2000 but did not recover from covid

The Spanish economy expanded by 5.1% in 2021, one tenth above that by the National Institute of Statistics (INE) at the end of January after rebounding 2.2% in the last quarter and exceeding forecasts by two tenths. This is the largest annual advance in Spain’s Gross Domestic Product (GDP) since 2000, although it was not enough to recover the ground lost in the pandemic.

The 5.1% advance in 2021 returns the Spanish economy to positive annual rates after the outbreak of the coronavirus caused . Even so, the expansion remains for said exercise that pointed to 6.5%.

The January forecast of the INE (5%) already warned that the economy would not recover to that level of growth or half of the ground it lost in 2020 due to the health crisis and now, in addition, it faces another year complicated by the war in Ukraine that began by Russia, leading economists to the possibility that the conflict will continue.

The value of GDP at current prices for the whole of 2021 stood at 1,205,063 million euros, 7.4% more than in 2020.

According to Statistics data, household consumption registered a growth of 4.7% in 2021, its highest annual advance since 1999, while public spending, which adds seven consecutive years of growth, increased at a rate of 3, 1%, two tenths less than in 2020. For its part, investment returned to positive rates after growing 4.3%, in contrast to the 9.5% drop it experienced in the first year of the pandemic, 2020 .

In the analysis by economic sectors, services led the annual growth, with an increase in gross added value of 6%, followed by industry (5.2%). Construction and agriculture, on the other hand, registered decreases of 3.4% and 3.7%, respectively.

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Public spending posted its biggest quarterly contraction since 1995

In quarterly variation, the increase (the third consecutive) was (2.6%). In this case, household consumption increased by 1.5% between October and December 2021, nine tenths more than in the third quarter, while public spending contracted by 1.6%, its largest quarterly decrease since the beginning of the series, in 1995.

By contrast, investment advanced 3.1% in the quarter, almost three points above the advance between July and September and its biggest rebound since the third quarter of 2020.

GDP at current prices reached its maximum in the historical series in the fourth quarter, at 319,515 million euros, 14,513 million more than in the third quarter and 4,492 million more than in the last quarter of 2019, before the pandemic broke out.

In year-on-year variation, the GDP stood at 5.5%, two points above the previous quarter and three tenths more than what was advanced at the end of January. The INE has revised upwards the year-on-year growth for the first three quarters of 2021, adding one tenth to the third quarter (3.5%) and the second (17.8%) and two tenths to the first (-4.1%) .

The contribution of national demand to the year-on-year GDP growth is 3.8 points, 1.4 points higher than that of the third quarter. The most positive contribution to the year-on-year variation, in volume, with 2.3 points, was that of the final consumption expenditure of households and Non-Profit Institutions Serving Households (NPISH). It was followed by gross capital formation, with 1.4. “The evolution of these aggregates is increased by a positive contribution of 0.1 points of the final consumption expenditure of the Public Administrations”, says Accounting.

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For its part, external demand presented a contribution of 1.8 points, eight tenths higher than that of the previous quarter. In this case, exports of goods and services contributed 5.7 points to the interannual evolution of GDP; the contribution was negative, on the other hand, from imports of goods and services (-3.9 points).

More than a million new jobs

Full-time equivalent jobs increased by 5.8% to 1,022,000 full-time equivalent jobs. They are five tenths less.

In this framework, productivity per full-time equivalent job registered a year-on-year decrease of 0.3%, while apparent productivity per hour actually worked increased by 2.8% compared to the fourth quarter of 2020; It is its highest rate since the second quarter of last year, the period of greatest restrictions due to the pandemic.

In terms of hours worked, employment in the economy fell 0.1% in the fourth quarter of 2021 from the previous quarter. This rate is smaller in the case of full-time equivalent jobs (0.7%) due to the decrease in the average full-time working hours (-0.8%).

In year-on-year terms, hours worked increased by 2.7%, a rate six tenths lower than that of the third quarter.

The interannual growth of the labor cost per unit of product (CLU) stood at 0.3%, a rate four points lower than the variation experienced by the implicit deflator of the economy (+4.3%).

Regarding the remuneration of employees, Accounting points out that it increased by 5.8% year-on-year in the fourth quarter, two tenths less than in the third, after increasing the number of employees by 5.8%, eight tenths less, and freezing the average remuneration per employee (0.0%) compared to -0.5% in the previous quarter.

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