The Basque Government will review its economic growth forecasts for 2022 due to the war in Ukraine

The Department of Economy and Finance of the Basque Government will be forced to review forecasts of economic growth for 2022 in Euskadi due to the war conflict in Ukrainewhich “inevitably” affects the evolution of the economy of the Autonomous Community.

This follows from the assessment that the Department has made of the quarterly economic accounts for the fourth quarter of 2021 of Eustat, which confirm the growth for last year at 5.6%the highest rate since 1998, as estimated by the Department of Economy and Finance.

In addition, the year-on-year figure for the fourth quarter was, in the forecast, 4.6%, just one tenth lower than the figure now known. However, the warlike events that have occurred between Russia and Ukraine “force a different assessment of 2022 than the one made in December”, as indicated by the Ministry led by Pedro Azpiazu.

The expansion experienced in 2021 by the economy of the CAV has been very important and somewhat higher than the average of European countries, which increased their GDP by 5.2% on average per year. Despite this, the GDP prior to the pandemic has not yet recovered, something that is expected to be achieved in the second quarter of this year.

The difficulties to be faced To achieve this, the Ministry has pointed out, there are “many and of great importance: the war between Russia and Ukraine, the control of the pandemic and future variants, the lack of supplies, which may be accentuated as a result of the conflict, and the high inflation , which is no longer seen as a temporary phenomenon, but may last longer than initially expected, precisely due to the effects of the war on energy prices (gas and oil) and because it may deepen the scarcity of raw materials for industry and agriculture”.