• The Stability Program 2015-2018 revises growth and job creation forecasts upwards
  • By the end of 2015, the level of employment at the end of 2011 will have been exceeded and unemployment will have decreased by 419,000
  • The unemployment rate will end 2015 below the close of the last Legislature and will decrease to 19.8% in 2016 on an annual average
  • The Spanish economy is heading out of the crisis with greater power for growth and employment than the large euro countries
  • The growth pattern will be more balanced between internal and external demand with improvements in competitiveness

The Spanish economy begins a new growth cycle with rates close to 3% and the creation of at least half a million jobs per year. This is reflected in the Stability Program Update (2015-2018) that the Council of Ministers has approved for submission to Brussels. For 2015, the growth forecast has risen to 2.9% (from 2%), a rate that continues in 2016 to reach 3% in the following two years. In terms of the Labor Force Survey (EPA), in 2015 600,000 jobs will be created and unemployment will drop by 590,000. The Government forecast is that at the end of 2015 there will be more employees than at the end of the last Legislature, unemployment will be lower by 419,300 people and the unemployment rate will be 21.1%, also below that of the last quarter of 2011 On an annual average, the percentage of unemployed over the active population will be 19.8% in 2016 to reach 15.6% in 2018.

GDP growth estimated at 2.9% for 2015 will be the highest since 2007; In other words, it will return to the rates that were before the longest and deepest recession in decades. This rate is expected to continue in 2016, which will mean that next year the income levels prior to the crisis will recover. For this, it is important to stay the course of economic policy, based on the combined effect of structural reforms, the reduction of imbalances and the creation of employment as a goal.

The Government intends to maintain the effort to reduce the public deficit, as one of the keys to improving confidence and financing conditions for the economy as a whole. The foreign sector will contribute positively to growth in 2016 and in subsequent years favored by improved competitiveness and with a positive balance in the current account for the entire period. Financing capacity vis-à-vis the rest of the world will be around 1.5% of GDP, which will gradually reduce external indebtedness. All this in an environment of price stability.

The macroeconomic picture presented today can be described as prudent and realistic and assumes that the Spanish economy is entering a phase in which growth is strengthening and consolidating, at a faster pace than expected. It is based on recent estimates from the European Commission, the European Central Bank (ECB) and their own. The world context is taken into account as well as a progressive improvement in the projections for the euro area. All this within the framework of the policies of the European Central Bank (ECB) and its effect on the exchange rate of the euro and the evolution of oil prices. It is a favorable scenario that provides “tail wind” to all the countries of the euro, but in which Spain grows and creates more jobs than the big ones in the eurozone thanks to the reforms carried out.

Domestic demand will continue its dynamism for the next four years and will act as the main pillar of growth. Both households and companies will continue in the deleveraging process, compatible with better access to credit. The improvement in consumption will continue thanks to the increase in disposable family income produced by job creation, price moderation, the fiscal reform (2015-2016) and the recovery of confidence. The foreign sector will improve its contribution to growth, driven by greater dynamism in exports, economic recovery in destination markets and gains in competitiveness. Imports continue to expand, although they moderate the growth rate in line with the evolution of final demand.

The greater flexibility introduced by the 2012 labor reform has enabled job creation with GDP growth rates significantly lower than those required before the reform. Furthermore, the improvement of financing conditions for companies and the normalization of credit will allow productive investment and job creation to grow at a rate close to 6% in the coming years. Construction returns to positive rates and investment in capital goods registers a sustained increase. This profound change in trend has already been noticed in recent quarters in relation to employment. In the first three months of 2015, employment grew by 3% compared to a year earlier, a rate that will continue throughout the projected period.

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