The considerable uncertainty surrounding Russia’s military actions in Ukraine has tempered expectations for a rapid normalization and a swift post-pandemic rebound. Reports from El Periódico de España indicate that Vladimir Putin’s moves earlier this year have shifted how Spanish companies view the economy’s trajectory, influencing their outlook for the current year.
The share of top executives in Spanish firms who anticipate a better or much better economy this year declined from 43% to 21% after the war began. In the two surveys conducted before and after the New Year, the proportion of leaders predicting worse or much worse conditions rose from 19% to 45%. The study, Perspectives Spain 2022, conducted by KPMG and CEOE, surveyed a thousand leaders and highlights a stark shift in sentiment across the business landscape.
Inflation remains the top concern for almost eight in ten managers, cited as a principal risk to the Spanish economy for 2022. Other significant worries include a weaker global economy, seen by 37% as a major threat, potential tax increases flagged by 36%, and rising geopolitical tensions highlighted by 30% of respondents.
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Roughly a third of executives, 37%, say they are reviewing or adjusting their 2022 strategy in light of the Ukraine conflict, while 41% are delaying changes as they monitor how events unfold and anticipate further developments.
continue with the plan
According to Juanjo Cano, president of KPMG Spain, managers remain cautious about the economy while holding onto strategic optimism for investment, growth, and hiring. He notes that despite the negative backdrop, adaptation remains the guiding principle for survival and continued progress.
Data from the KPMG and CEOE study show that 77% of executives expect their company’s turnover to rise in 2022 despite the ongoing conflict and the energy crisis. Nearly half, 48%, anticipate revenue growth exceeding 5%. In the pre-war survey, those figures were 80% and 47% respectively. Six out of ten firms also plan to increase investment for the year, with the target retained across surveys.
Employment projections for Spanish groups remain reasonably hopeful even after the invasion, though expectations varied between the first survey, conducted from December to February, and the second, conducted from April to May. About 46% of companies plan to expand their workforce, while the share expecting reductions in staff stayed at 11% across both rounds.
Antonio Garamendi, chairman of CEOE, emphasized that Spanish business leaders recognize the need for additional measures to solidify the recovery and address inflation pressures. He urged a continued push toward a more efficient and productive economy, highlighting digitalization and sustainability as priorities. He called for policy certainty, structural reforms, and a regulatory environment that supports business activity through tax relief and fiscal incentives.