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MADRID, Sept 21 (Reuters) – Spain’s economic recovery gained momentum in the third quarter, prompting a leading international organization and the Bank of Spain to improve their forecasts on Tuesday as the Spanish government eyed a return to pre-pandemic activity by the end of 2021.

One of the countries hardest hit by the first wave of the pandemic in 2020, Spain’s GDP collapsed by 10.8%, but the Organization for Economic Co-operation and Development (OECD) said on Tuesday that it is expected to be the group’s fourth fastest growing economy in 2021, expanding by 6.8%.

The Bank of Spain also raised its growth forecast for 2021 slightly, to 6.3%, although it said pandemic-related uncertainties remain.

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The central bank said it did not expect activity to return to pre-pandemic levels until 2022, dampening optimism from the Spanish government, which is betting heavily on the stimulus effect of bailout funds. relaunch of the European Union.

Speaking at a press conference, Economy Minister Nadia Calvino maintained the government’s economic growth targets of 6.5% for 2021 and 7% for 2022.

Private consumption and the release of household savings accumulated during the months of confinement and restriction of social activities will be the catalyst for this economic recovery, the OECD and the Bank of Spain have agreed.

Calvino said the Spaniards were sitting on up to 50 billion euros in savings which could be released in the coming months.

Despite the inflationary pressure of a meteoric rise in electricity prices, analysts believe that the effect will be transitory and exclude, for the moment, the effects of the second round.

Calvino stuck to his previous forecast that unemployment would fall to 15.2% at the end of 2021, down from 15.3% in the second quarter, but still significantly higher than the 13.8% seen in the fourth quarter of 2019. .

Strong domestic demand and looser COVID-19 restrictions over the summer as well as a partial recovery in the tourism industry, including the return of significant numbers of foreign tourists, have contributed to a brighter outlook. optimists. Read more

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Reporting by Inti Landauro and Belen Carreno; Editing by Nathan Allen, Angus MacSwan and Andrea Ricci

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