Unicaja Banco S A : publishes a new issue of the report ‘Previsiones Económicas de Andalucía’ (no. 107/2021)

Unicaja Banco publishes a new issue of the report 'Previsiones Económicas de Andalucía' (no. 107/2021)

In 2022, the GDP is expected to grow by 5.5%

12 JAN 2022

6 Min reading

Unicaja Banco has published the issue number 107 of the quarterly report 'Previsiones Económicas de Andalucía' (Economic Forecasts for Andalusia), prepared, as in previous editions, by Analistas Económicos de Andalucía. As indicated in the report, the estimates made by Grupo Unicaja Banco's research company suggest that the regional GDP could have grown in 2021 by 4.8%, whereas employment could have grown by 3.4%, with the unemployment rate standing at 22.1%.

In 2022, the GDP is expected to grow by 5.5%. With regard to employment, an increase of 2.4% is expected for the year average, with the unemployment rate falling to 21.0%.

This report is divided into three sections: 1) Economic environment; 2) Recent evolution of the Andalusian economy; and 3) Economic outlook for Andalusia 2020-2021. The first section describes the international and national backdrop and its recent evolution. The second section analyses the situation of the Andalusian economy, with special focus on the evolution of the main indicators and on the region's productive specialization. Finally, the last section includes outlooks on the forecasts on the evolution of the Gross Domestic Product (GDP) and employment in Andalusia for 2021 and 2022.

Global and national economic environment

According to the OECD's latest report, the economic activity continues to recover at a global level, reaching pre-pandemic levels. However, the recovery is uneven by large geographical areas. In the last months of 2021, the productive and commercial activity has lost momentum due, mainly, to the surge of the omicron variant and to the imbalances arising from tension in global production chains, as well as to the rise in prices of raw materials and intermediate goods. The OECD estimates that, for the whole 2021, the global economy will have grown by 5.6% and by 4.5% in 2022.

In this context, in the specific case of the Spanish economy, the latest data from the Quarterly National Accounts, corresponding to the third quarter of 2021, indicate that the Spanish GDP registered a variation of 2.6% (0.6 p.p.) compared to the previous quarter. This rate is higher than the preliminary figure estimated on October, placing the year-on-year GDP variation at 3.4%.

The moderation in the economic activity in the fourth quarter of the year, compared to the previous months, has made the main international bodies and national research services to make a downwards review of their growth outlooks. The latest macroeconomic projections of the Bank of Spain indicate that the GDP in 2021 could have grown by 4.5%, and that the recovery could accelerate in 2022 to reach 5.4%.

Recent evolution of the Andalusian economy

According to the latest data from the Quarterly Regional Accounts of Andalusia, published by Instituto de Estadística y Cartografía de Andalucía (IECA), in the third quarter of 2021, the regional GDP has grown by 1.5%, 0.2 p.p. less than in the previous quarter. Compared to the third quarter of 2020, the GDP has grown by 3.1%, although production remains 6.0% below the figure of the fourth quarter of 2019 (-5.9% in Spain).

The contribution to the internal demand has been of 1.8 p.p. In y-o-y terms, household consumption has increased by 1.0% and government consumption, by 5.4%, whereas investment has fallen by 1.7%. The external sector made a positive contribution of 1.3 p.p., with higher increase in exports (16.7%) than in exports (10.8%).

On the supply side, the GDP growth responds to the increase in the services sector (5.9% year-on-year), as both agriculture and construction and industry have registered a drop in their activity levels. Within the services sectors, there has been a general rise by branches, at rates ranging from 0.4% in professional activities to 12.5% in retail, transportation and hospitality.

With regard to the labour market, the data of the Quarterly Accounts and the Labour Force Survey (EPA) reflect a recovery of the employment in the third quarter of 2021, where the number of people in employment (3,147,500, according to the EPA) exceeds the pre-crisis levels. Likewise, the number of employees contributing to the Social Security scheme (3,213,177 average in November) exceeds the figure reached in the same month of 2019, although it has to be reminded that the said number includes employees on furlough.

According to the EPA, in the third quarter of 2021, employment in Andalusia grew by 5.4% year-on-year (162,300 people), based on the increase in construction (10.5%) and services (7.5%), sectors where employment exceeds pre-pandemic levels. The number of unemployed people has fallen by 2.5% in y-o-y terms, and the unemployment rate stands at 22.4% (14.6% in Spain), 1.4 p.p. lower than in the same quarter of 2020.

Economic Outlook for Andalusia 2021-2022

The forecasts of Analistas Económicos de Andalucía indicate that in 2021, the Andalusian GDP could have grown by 4.8%. With regard to demand, household consumption and investment would post a growth of 5.9% and 3.0% respectively, whereas, on the supply side, a general increase is expected, except in the agricultural sector (-1.2%), and especially remarkable in services (5.8%).

As for employment, the number of people in employment is estimated to have grown by 3.4% in the year average. Unemployment could have grown by 2.2%, with the unemployment rate standing at 22.1%, 0.2 p.p. lower than the 2020 average.

In 2022, the Andalusian economy is expected to intensify its growth path, reaching 5.5%, in a context of high uncertainty because of factors such as the new virus variants, bottlenecks in production chains or the increase in prices and costs.

Private consumption and investment could grow at a higher rate than in 2021, at 6.2% and 7.0% respectively. Additionally, the increase will be general in all the sectors, with higher rates for services (6.1%) and construction (5.1%). The number of people in employment is expected to grow by 2.4% in the year average for 2022, and the unemployment rate would stand at 21.0%, 1.1 p.p. below that estimated for 2021.