The Málaga Association of Economists announced last Friday January 14 that the economy of the Andalusian province looks set to have closed 2021 with growth of 5.4%, which is above the average in both Spain (4.5%) and Andalucía as a whole (4.8%).
As expected, both the supply chain crisis and the sixth wave of the pandemic have slowed the pace of economic growth compared to a few months ago when the growth rate was 6.6% for Málaga and about 6% for Andalucía and Spain.
The faster pace of economic growth in Málaga is mostly put down to the strength of the tourism and real estate sectors, with the Costa del Sol expecting a surge of British tourists as next month. Even so, expectations for 2022 are “uncertain” until the pandemic situation improves and inflation is brought under control.
Inflation has run rampant in Spain due to the rising cost of energy and the problems of global commercial supply chains. As a result, the experts believe that economic activity in Málaga will not get back up to pre-pandemic levels until 2023.
Economist Juan Carlos Robles pointed out that inflation is the factor that worries them most, as 2021 has ended with a year-on-year rise of 6.5% in Spain, meaning that prices are growing above production. “This has to be combated, because otherwise we are actually decreasing”, he said. His real fear, however, is that central banks and governments will resort to raising interest rates in their eagerness to do so, which would lead to a drop in investment and consumption.
“We have always said that the lack of industrial fabric was one of Malaga’s weaknesses, but in this case it has been a positive factor because it is now the sector most affected by production problems in factories. Tourism, meanwhile, when international mobility was allowed, has recovered a good part of its demand. All in all, 2022 should be a better year for tourism”, he concluded.