- The labor market stabilizes and will begin to create employment in the second part of next year
- The external surplus will reach a historic 3.4% of GDP thanks to exports and debt
The Council of Ministers today approved the new macroeconomic forecasts that accompany the 2014 Budgets. The Spanish economy will begin to grow next year (0.7%) and the unemployment rate will drop to 25.9%, forecasts that improve those that appear in the Stability Program (2013-2016) that can also be described as prudent and conservative. In 2014 the labor market practically stabilizes, so that in the second part of the year employment will begin to be created, the main objective of economic policy.
The return to economic growth means leaving behind the most serious recession in our recent history, without there having been an appreciable recovery since 2008. The reduction of imbalances and improvements in competitiveness in these almost two years will allow us abandon the recession in the second part of 2013, so that the economy begins to rise in 2014 on an annual average. Investment and private consumption will grow again (0.2% in both cases) although, overall, national demand will continue to subtract from GDP (-0.4%), due to the construction sector and the decline in public consumption . The foreign sector will contribute 1.2 points to growth, thanks above all to the strength of exports.
The new pattern of the economy combines an improvement in domestic demand through investment, mainly in capital goods, and private consumption, with a foreign sector that will continue to be a growth engine. The gains in competitiveness achieved with the labor reform and the liberalization of markets and services have produced a structural change that will remain in the future as one of the strengths of the Spanish economy. This improvement in the position vis-à-vis the exterior will allow obtaining a historic surplus of 2.3% of GDP this year and even higher, of 3.4%, next year. Thus, the dependence on the exterior in attracting resources disappears, reflecting the indebtedness of the economy and the generation of internal savings.
The labor market also improves compared to previous forecasts. The unemployment rate went to 26.6% in 2013 from 27.1% of the previous forecast and in 2014 it stood at 25.9% compared to the previous 26.7%. This will be the first year in which the annual average unemployment rate has decreased since the start of the crisis in 2008. Employment practically stabilized in 2014 (-0.2%), a figure that also improves compared to the previous forecast, and compared to a 3.4% drop expected for the current year. These data are expressed in annual average, so they are compatible with the fact that in the second half of next year the Spanish economy stops destroying employment. Job creation since mid-2014 will occur with annual GDP rates below 1%, which is a consequence of the labor reform approved by the Government last year.
