• Economic growth will be 3.2% in 2016 and 2.5% next year, with a more balanced composition
  • The unemployment rate will drop more than eight points at the end of 2019, to 12.8%, and there will be more than 20 million employed
  • Financing capacity with respect to the rest of the world will remain above 2% of GDP

The Council of Ministers has agreed to an upward revision of the macroeconomic forecasts for both this year and next. Economic growth rose to 3.2% in 2016 and 2.5% in 2017, which will allow the level of income prior to the crisis to be recovered in the middle of next year. The composition of growth will be more balanced between internal and external demand. The creation of almost two million jobs is foreseen in the 2016-2019 period, which will allow slightly exceeding the 20 million employed in four years. The unemployment rate will decrease to 12.8% at the end of 2019 (8.1 points less), which would place the percentage of unemployed over the active population at the lowest level since the start of the recession.

The Spanish economy will enter 2017 with a cruising speed of over 3%, which induces the upward revision of macroeconomic forecasts, in line with that carried out recently by major international organizations, such as the IMF, the European Commission, and more recently, the OECD. For 2016, the Government estimates that economic growth will rise to 3.2% on an annual average, three tenths more than that estimated in the Budget Plan sent to Brussels in October of this year. For 2017, the forecast rises to 2.5%, two tenths more. The following two years it is estimated that a growth rate of 2.4% will be maintained. In this way, the Spanish economy will maintain growth rates over the next few years above the most advanced economies in the world and, in particular, the partners in the euro area.

The growth pattern that is projected for the period 2016-2019 is more balanced between internal and external demand. The slightly downward profile of the contribution of domestic demand from 2016 occurs in parallel with a positive contribution from the foreign sector. Within domestic demand, both consumption and investment show a high dynamism throughout the period, thanks to factors such as the increase in disposable income of families, the moderation in prices, the creation of employment and the improvement in financing conditions. Private consumption accelerates in 2016 and stabilizes at more moderate rates from the following year. Investment, for its part, has remained at rates close to 3.5% since 2017. Both capital goods and construction contribute to this good evolution.

The improvements in competitiveness achieved by the Spanish economy are behind the growth of exports, at present, at record levels. It is estimated that sales of Spanish goods and services abroad will grow throughout the period at rates close to 6%. The growth rate of foreign purchases also stabilizes below 6%, in line with the evolution of domestic demand. During these four years, the Spanish economy will register a financing capacity with respect to the rest of the world of over 2% of GDP.

Job creation will maintain an average annual growth rate close to 3% this year and around 2.5% in the next three in terms of national accounting; that is, in full-time equivalent jobs. After the labor reform, the Spanish economy has reduced the threshold of economic growth necessary for job creation to 0.7%. The unemployment rate will decrease progressively, about two points per year, to 12.84% of the active population at the end of 2019, which means returning to the levels prior to the recession period that began in 2008.

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