Overturning a government prediction late last year that Portugal’s budgetary deficit for 2021 would be some 4.3%, the central bank’s Governor Mário Centeno said in February that the number could be closer to or even below 3%. This is welcome news as it will mean less pressure in 2022.
Aside from predicted economic growth for both Portugal and the south of Spain, there are encouraging signs for the Spanish economy with an increase in the national minimum wage; from January 2022, this increased to Euro 1000 per month or 54.4% more than it had been in 2016.
In addition to fighting its highest inflation rates in 35 years, Spain is also struggling to limit energy prices. As a result of the Russia/Ukraine conflict, electricity and gas prices are rising rapidly throughout Europe. At the same time, a labour strike in Spain involving transport companies and truckers is limiting economic activity and badly affecting the recycling industry.
The increase in electricity prices is also causing disruption for smelters and foundries. Currently, demand for secondary aluminium is dropping because of disruption to the automotive industry supply chain through missing parts from Ukraine.