Spain & Portugal
In the third quarter, the Portuguese economy had been starting to recover from the pandemic and most COVID restrictions were lifted in October. But even though Portugal has one of the world’s highest vaccination rates at around 87%, infections have increased rapidly again and the government was forced to bring back some restrictions on December 1. The 4.8% GDP growth target for 2021 is now unlikely to be reached owing to this new surge in infections.
Unemployment has been a problem for Portugal since the economic crisis in 2014 and this intensified during the pandemic to the extent that the rate is currently at 6.7%.
The Bank of Spain expects a drop in GDP for the fourth quarter of 2021 and the opening quarter of 2022 owing to higher COVID infection levels, rising inflation and supply bottlenecks. The tourism sector made up around 18% of GDP prior to the pandemic but is unlikely to recover to previous levels before 2023. Spain’s economic development depends on implementation of recovery funds, household consumption and limiting the spread of COVID.
Meanwhile, the European Commission has downgraded its forecast for Spain’s GDP growth in 2022 from 6.3% to 5.5%.
The scrap market is slowing towards the end of 2021, with many suppliers holding their deliveries and sales for this year. Prices of secondary aluminium ingots as well as scrap have dropped significantly since the previous Mirror report and demand is lower. However, demand for copper scrap has continued to be really strong and looks set to remain so for next year.