The National Institute of Statistics (INE) has just revised upwards the Gross Domestic Product (GDP) of Spain, and with this revision – which has been the largest in its history – there are now three in just two years (the first took place in September 2022 and the second in September 2023). This means that the indicator par excellence for quantifying Spain’s wealth has been underestimated and that in reality it is 3.2% higher than what was believed in 2021 (and 1.1% higher than what was believed until yesterday). In other words: we have believed for three years that the Spanish economy was doing worse than it really was.
It is important to keep in mind that this is not a pedantic academic or statistical debate: the level of GDP has enormous political and economic implications. Its underestimation for three years works against the Spanish coalition government and in favor of its political and media opponents. Who does not remember the opposition’s hammering that the Spanish economy was the one that had grown the least in Europe after the pandemic? Well, it turns out that this was not true: we now know that Spain’s GDP was behaving like that of the rest of its neighboring countries (and much better in recent years). But since the INE data was what it was at the time, critics enjoyed the legitimacy to criticize the government’s economic policy – even if this data did not match the rest of the statistical sources. In recent months, as GDP has grown strongly, even from underestimated levels, criticism has turned to the weakness of real GDP. per capita that Spain has compared to other European countries, but again, this criticism will lose its force with the revision of the INE. In addition, the official GDP data have also served the opposition to harshly criticize the budgets presented by the coalition government; they have always been called unrealistic because they considered that the Spanish economy would grow more than the INE predicted. But the truth is that the one who was moving away from reality was the INE and not the government (which, in fact, has been pessimistic, especially in 2023).
