Spain, the second advanced economy that will take the longest to recover its pre-covid GDP per capita

The OECD has given Spain good news and bad news. The good: that it will be the Eurozone country where the economy will grow the most this year. The bad: that, among advanced economies, it will be the second slowest to recover the GDP per capita it had before covid, only behind Iceland.

This agency has generally improved growth forecasts in its latest report, in which it very clearly links the recovery to the deployment of vaccines. "Countries that are getting infections under control with effective public health strategies are seeing their economies recover more quickly," it says. This explains why, for example, the United States or the United Kingdom (which at the end of May already had 86% and 90% of the population vaccinated, respectively) can grow by about 7% in both cases.

More vaccines = more jobs

Spain is well positioned in terms of vaccinations when compared with other European countries: 52% of the population has already been given a dose, a level almost identical to that of Germany and slightly higher than that of France. This will allow it to register a GDP growth of 5.9%, according to the OECD, an estimate almost identical to the 6% forecast by the Bank of Spain. Even so, the problem for Spain is that the fall in 2020 was the hardest of all the OECD: 10.8%. The dramatic decline during the first year of the pandemic also explains why now growth figures are higher.

However, when the OECD analyses how long it will take countries to recover the GDP per capita they had in December 2019, Spain again comes out badly. Specifically, the Spanish will still have to wait two years (second quarter of 2023) to recover that level. Only Iceland (third quarter of 2023) is worse.

Neighbouring countries, such as Portugal and France, will return to their pre-pandemic situation in just over a year (third quarter of 2022) and others that also have an economy highly dependent on tourism, such as Greece and Italy, will do so even earlier (second quarter of 2022). Among the emerging countries there are more serious cases than those of Spain or Iceland: South Africa will have to wait until the end of 2024 to return to its starting point, while Argentina will have to wait until 2026. Precisely, the fall in tourism seems to explain an important part of the economic slump experienced by the economy during the pandemic: the export of services fell by 48% in Spain, while the sale of Spanish products abroad remained almost the same and only fell by 0.7%.