Castilla y León ends the recession and "glimpse" strong growth in the second quarter

4/06/2021 – 13:21

The economy of Castilla y León did not avoid negative growth at the beginning of the year, but with encouraging aspects that allow anticipating the end of the recession: the fall in GDP, of 1.1%, was much less than in the previous four quarters and investment grew for the first time, while the industry chained its second rise.

For the Minister of Economy and Finance, Carlos Fernández Carriedo, these data, together with the recovery of the activity by the end of the alarm state and the comparison with what was the worst moment of the economy, allow to “glimpse” that “probably” the second quarter will register a “very intense growth”, although the economic crisis will not end and it will be necessary to wait until 2023 to recover what was lost, 7.9% during the past year.

Carriedo has reported the Regional Accounting data from January to March, a period that resulted in a 1.1% drop in GDP, the smallest since the appearance of the coronavirus. The counselor has especially highlighted the increase in gross capital formation (investment), 1.5%, for the first time since the recession began, which is a symptom of the “change in trend”, and a new rise in the industry. , 4.1%.

In terms of employment, measured in full-time equivalent jobs, the data reflects a rise in the first quarter of 0.2%, with 1,500 jobs, an insufficient increase in response to the 50,000 lost in 2020.

The counselor has shown confidence in the recovery of the automotive sector, affected by the drop in international demand and production problems due to the breakdown of the supply chain due to the lack of semiconductors. However, it has warned of “worrying structural aspects” by the government’s decisions regarding diesel or highway tolls “that create mistrust.”

With regard to construction, which has registered a year-on-year drop of 6.5% in the quarter, two positive aspects have been highlighted: the recovery of the bidding procedures and the arrival of European funds linked to the rehabilitation of houses.

However, it has recognized that the indebtedness of public administrations and the increase in spending on public services can weigh down the pace of public works.

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