• The labor market stabilizes and will begin to create employment in the second part of next year
  • The foreign surplus will reach a historical 3.4% of GDP thanks to exports and debt reduction

The Council of Ministers approved today the new macroeconomic forecasts that accompany the 2014 Budgets. The Spanish economy will start to grow next year (0.7%) and the unemployment rate will fall to 25.9%, forecasts that improve those that appear in the Stability Program (2013-2016) that can also be classified as prudent and conservative. In 2014, the labor market is practically stabilized, 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 an appreciable recovery since 2008. The reduction of imbalances and improvements in competitiveness in these last two years will allow us leave the recession in the second part of 2013, so that the economy begins to go back in 2014 on an annual average. Investment and private consumption will grow again (0.2% in both cases) although, as a whole, national demand will continue to subtract 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 economic pattern combines an improvement in domestic demand through investment, mainly in capital goods, and private consumption, with an external sector that will continue to be a growth engine. The competitiveness gains achieved with 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 of the position in front of the outside will allow to obtain a historical surplus of 2.3% of the GDP this year and even higher, of 3.4%, the next one. In this way, the dependence of the exterior on the collection of resources disappears, as a reflection of the indebtedness of the economy and the generation of internal savings.

The labor market also improves with respect to previous forecasts. The unemployment rate rises to 26.6% in 2013 from 27.1% of the previous forecast and in 2014 it stands at 25.9% compared to the previous 26.7%. This will be the first year in which the annual average unemployment rate has been reduced since the beginning of the crisis in 2008. Employment practically stabilizes in 2014 (-0.2%), which also improves with respect to the previous forecast, and against a 3.4% drop expected for the current year. These data are expressed in annual average, so they are compatible with the Spanish economy stop destroying employment in the second half of next year. The creation of employment 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.



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