Catalonia’s GDP expected to return to pre-Covid levels in 2022

Catalonia’s economy is doing better than expected following the severe worldwide pandemic-related downturn. The Catalan government has announced that it expected the GDP to return to pre-Covid levels next year after increased the projected economic growth in 2021 and 2022 to 6.4%. In May economists forecast a 6% rise in 2021 followed by 5.2% growth in 2022, but have revised figures, attributing it to heightened investment and external as well as domestic demand.

Household consumption is up 7.9% while investment has increased by 8.3% According to Catalonia’s economy and finance department, this is “closely linked to improved confidence in the economy and the pandemic, as well as the gradual spending of savings earned during the health crisis as well as the sustained recovery of the labor market.”

The government believes the unemployment rate, which was 12.28% in the second quarter of 2021, could drop to 12.1% by the end of the year and to 11.2% in 2022 following the creation of around 124,000 jobs. The year before the pandemic hit, joblessness stood at 11%.

This new forecast “gives cause for optimism,” Catalan economy minister Jaume Giró said last week. “The risk balance has stabilized thanks to the progress and efficiency of the vaccine rollout and the subsequent easing of most restrictions as well as the European recovery plan’s potential.”