Lower Spanish growth expected this year, bank governor says, with hopes pinned on vaccine rollout

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Lower Spanish growth expected this year, bank governor says, with hopes pinned on vaccine rollout


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Economy7 hours ago (Mar 14, 2021 08:10AM ET)

Lower Spanish growth expected this year, bank governor says, with hopes pinned on vaccine rollout
© Reuters. Closed-down businesses amid the coronavirus disease (covid-19) pandemic, in Madrid

MADRID – (Reuters) – Spain’s economic recovery from the covid-19 pandemic will probably be slower than expected this year, the central bank chief said in an interview published on Sunday, with eventual faster growth dependent on a rapid vaccine rollout.

The Bank of Spain had said the economy would grow 6.8% in 2021 and it would reach its pre-pandemic levels by next year.

However, Pablo Hernandez de Cos, the governor of the Bank of Spain, told El Mundo newspaper that this year’s GDP would probably be lower.

“I believe that we will make a slight downward revision of our forecasts for this year for the Spanish economy due to the deterioration observed in the first part of the year,” he said.

“We expect a more intense recovery from the second semester, but the exact moment and its intensity will depend, to a large extent, on the rapid distribution of the vaccines.”

De Cos said Europe’s recovery depended on the speed of the rollout of its vaccine programme but it was lagging behind.

The Spanish economy would not recover to pre-pandemic levels until 2023, he said.

“For the euro area, we expect it in mid-2022. For Spain, we move to 2023 the moment when the Spanish economy will recover the levels of 2019 in our central scenario,” he added.

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