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Brussels revises Spain’s growth forecast downwards but foresees a strong rebound in 2022

The Twenty-seven have hardly been able to savor a few days the sweet moment that the statistics of the third quarter of the year gave them. The European Commission on Thursday will return the countries to Europe to the times of pandemic. Also to Spain, for which Brussels expects a GDP contraction of 12.4% this year, especially due to the sharp decline in the tourism and hospitality sectors, according to community sources. The Community Executive also revises down the strong expansion that it predicted for 2021 to spread it over the next two years, so that Spain would grow above France or Italy: 5.4% in 2021 and 4.8% in 2022 .

The euro zone countries stood in July thinking that from then on the slope had ended. Third-quarter GDP data published by the statistical office Eurostat indicates that euro zone ministers would at least have moved across a plain had the second wave of covid-19 not broken out in autumn. That blow sank the service sector on practically the entire continent by forcing shops, bars and restaurants to close in France, Belgium, the Netherlands or the Czech Republic. In the case of Spain, there is also the closure of the tourism sector abroad last summer, which already meant that Brussels worsened the spring forecasts in July, which contemplated a drop in GDP of 9.4% for 2020 and a rise in the 7% in 2021.

The new strong impact on tourism, catering and cultural activities has led the Commission to worsen Spain’s forecast for this year and next; and to carry over part of the rebound forecast for 2021 to the following year. Brussels is more positive than last summer’s forecasts with Italy, for which it predicts a 9.9% decline. However, he believes that next year (+ 4.1%) and the following (+ 2.8%) will grow less than Spain, as these sources explained to EL PAÍS. That same path, of 4.1% in 2021 and 2.8% in 2022, is what Brussels foresees for France.

The document that the Commissioner for the Economy, Paolo Gentiloni, will present this Thursday, is in line with the most pessimistic range that the Bank of Spain and the IMF were considering, which foresees a contraction of 12.8% for this year. In any case, it is above the 11.2% set by the Government.

The deficit will remain at 8.6% of GDP in 2022

The economic vice president, Nadia Calviño, reasoned before the Eurogroup this week that the forecasts prepared by the Commission had a cutoff date of October 22. That meant that they had not collected the growth data for the third quarter of the year. That 16.7% advance was much better than predicted by analysts and international institutions. In addition, Calviño argued that neither the measures included in the first draft of the recovery plan nor in the Budget project were taken into account.

This worse growth forecast leads, however, to Brussels pointing out that Spain’s deficit amounts to 12.2% of GDP this year, compared to the 11.3% anticipated by the Government, and that it will be reducing very slowly until 9.6% in 2021 and 8.6% in 2022. Debt will also grow. With the difference that Brussels does not see that Spain can reduce it in the short term, so that it will go from 120.3% of GDP this year to 122% next year and 123.9% in 2022.