[Economics] The INE raises the growth of the economy by one tenth in 2021, up to 5.1%

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In the fourth quarter the economy grew 2.2%; two tenths more than estimated

Construction workers.

 

The INE has revised upwards the growth of the economy last year: Spanish GDP increased by 5.1%, compared to the 5% anticipated in advance, in 2021, after the pandemic caused the worst recession in the historical series: a 10.8%. In the fourth quarter, the growth of the economy was 5.5% compared to the same period of the previous year, three tenths more than expected, and in quarterly terms the economy grew by 2.2%; they are 0.2 points more than expected but 0.4 less than the previous quarter.

 

The main element that has contributed to the recovery has been household spending, also thanks to the removal of health restrictions. Thus, household spending has registered an increase of 4.7% in the year, a record since 1999 after, yes, a 12.2% collapse in the year of the pandemic. However, despite the fact that the economy slowed down in quarterly terms, families accelerated spending: it grew by 1.5% in the fourth quarter compared to 0.6% in the third.

Something similar happens with investment, which grew 3.6% quarterly, thanks above all to investment in fixed capital (+4.6%). In the year as a whole, it advances 4.3%, a figure that is, in any case, lower than that of 2019. The vitality of demand also means that imports have accelerated, going from a quarterly rate of 1.8% to 4 , 5%. Lower public spending, for its part, also weighs on the final data: the administration spent 1.6% less than the previous quarter, after seven consecutive quarters of increased spending. The gradual normalization of the health situation is bringing the indicators closer to the usual rates, particularly in the quarterly rates

 

The inflationary pull in the last quarter of the year has taken the GDP at current prices to an interannual rate of 10.1% in the last quarter of the year compared to the previous year. The GDP deflator, that is, the correction of the data by taking prices into account, climbed 2.4 points to 4.3%. This level is, in any case, two points below the CPI data published by the INE. Thus, the nominal GDP reached the maximum of the historical series: 319,515 million euros. In 2021 it was 1,205 billion, a figure that is 3.1% below 2019.

 

In terms of employment, hours worked fell by 0.1% compared to the previous quarter, in a quarter marked in its last weeks by the appearance of the omicron variant, which is not enough an increase in sick leave. In year-on-year terms, it grew by 2.7%, although the rate of recovery slowed compared to the previous quarter (it was 3.3%). Full-time equivalent jobs are growing, 0.7% quarterly, but their growth is also slowing. In year-on-year terms, employment grew by 5.8%, which represents an increase of 1.02 million full-time equivalent jobs in one year.

 

Link: https://cincodias.elpais.com/cincodias/2022/03/25/economia/1648195190_444111.html