Spain & Portugal

The Portuguese Public Finance Council has revised upwards its GDP growth estimates for 2021 from 3.3% to 4.7%, and for 2022 from 4.9% to 5.1%. The tourism industry has recovered and consumption by private households has increased after the remaining pandemic restrictions were lifted.

Meanwhile, Spain has significantly lowered its growth forecast for this year. The July estimate of 2.8% for the second quarter was not reached, with the National Statistics Institute instead announcing growth of only 1.1%. Nevertheless, economy minister Nadia Calviño expects a return to pre-pandemic GDP levels by the end of 2021.

Anticipated growth of 6.6% in household consumption was revised downwards to 4.7%.

Spain’s growth has been challenged by a number of circumstances, with households and businesses pressurized in particular by increasing electricity costs. These high prices, as well as the availability of electricity, are becoming a major topic all over the world, especially in China. While Europe is struggling with increasing electricity prices owing to low stockpiles of natural gas and various other reasons, coal shortages in China have led to power outages and blackouts in around 20 provinces. The energy shortage could lead to lower demand for metals and scrap in the future.

Supply of non-ferrous scrap is still low while demand remains strong at present. In the copper market, for example, supply and material availability continue to be below normal whereas demand is still healthy. The aluminium market is still facing problems owing to the shortage of silicon and magnesium as well as a lack of chips in the automotive industry.