Juan José Fernández Figares | According to the final estimate of the data released yesterday by the National Statistics Institute (INE), Spain’s Gross Domestic Product (GDP) contracted by 0.4% in Q1 2021 compared to Q4 2020, when it had remained stable (0.0%). In the quarter under analysis, household consumption fell by 0.6% (0.0% in Q4 2020); household spending fell by 0.6% (0.0% in Q4 2020); public spending contracted by 0.1%; and investment contracted by 0.8% (+1% in Q4 2020).
In year-on-year terms, Spain’s GDP contracted by 4.2% (-8.9% in Q4 2020). This makes five consecutive quarters in which Spanish GDP has contracted in year-on-year terms. It is worth noting that domestic demand subtracted 2.2 points from GDP growth in Q1 2021, an impact of four points more than in Q4 2020, while foreign demand contributed 2 percentage points, seven tenths more than in the previous quarter.
Assessment: figures highly conditioned by the third wave of the pandemic. And, above all, by the restrictions on activity imposed by the country’s various administrations in an attempt to halt the advance of Covid-19. It is very likely the Spanish economy will have bottomed out in Q1 2021. That said, the pace of recovery will depend a lot on the measures adopted by the government and on the real structural damage the pandemic has caused to the Spanish productive fabric.