Spain has gone from being the last major European power to recover from the coronavirus crisis to becoming one of the economies that achieved this milestone a year earlier than expected. The reformulation of the calculations of the INE (National Institute of Statistics) has completely and by surprise changed the evolution announced until now, always in a positive sense, when its latest calculations suggested that it had been just in the middle of this year when it had achieved, long after the rest of the European neighbors.
With the review of INE data on the table, Spain recovered throughout last year the level of Gross Domestic Product (GDP) prior to the pandemic that hit the economy since March 2020. Specifically, the increase in GDP was higher as estimated both in 2021, when it grew by 6.4% (compared to the 5.5% initially announced), and in 2022, with 5.8%, which contrasts with the 5.5% advertised by the INE. In addition, it clarifies that at the worst moment of the pandemic, the economy fell 11.2%, one tenth less than initially estimated.
The data review comes at a key moment for the economy, since in this last stretch it will deflate in part due to the effects of inflation and the rise in interest rates. Since the worst rigors of the pandemic passed, with the economic shock, the INE has maintained the difficulty it has had in correctly quantifying all the data it has been providing in terms of GDP, but also in inflation. Now, he points out that he is “aware of the difficulty of statistically measuring economic activity in circumstances as exceptional as those caused by the Covid-19 crisis.”
In fact, there have been continuous subsequent revisions carried out once the official data for each quarter were announced. Questions about the INE have been common in the last three years. In fact, in the summer of last year, the person who was president of the organization, Juan Rodríguez Poo, left his position in June amid disagreements with the Government over several methodological issues regarding the measurement of GDP and inflation. Elena Manzanera, director until now of the Institute of Statistics and Cartography (IECA) of Andalusia, was the one who succeeded him.
The change came after warnings such as those from the governor of the Bank of Spain, Pablo Hernández de Cos, who had warned at the end of 2021 that there would be a “significant downward revision of growth” in Spain for this year after the modification of the records made by the INE in the second quarter and the calls for attention made by various international organizations regarding the evolution of the GDP. A CaixaBank Research report also indicated that the inflation estimate two years ago was different due to the evolution of electricity prices.
With this new upward revision, other statistics also change favorably, such as public debt and the deficit. The INE data includes some 20,000 million euros in the Spanish economy, which allows the debt/GDP ratio to be reduced by an additional 1.6 points and will allow the Government to achieve the goal of reducing debt to below 110% by the end of this year. anus.
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