FFE Magazine

Spain to raise growth forecast

by FFE EU News staff


Minister Luis de Guindos. Photo source: Bloomberg

Economy Minister Luis de Guindos announced on Monday that Spain will soon improve unemployment forecast for the current year and slowly raise growth and unemployment forecasts for 2014.

The government’s latest forecast sees a 1.3% dip in overall economic output in 2013 before a return to a growth of 0.5% in 2014. In 2012, the economy shrank by 1.6%.

The minister reiterated the government’s claim that the economy will emerge from the 2-year recession in the current quarter. A “very light” rise in gross domestic product is expected between July and September.

He added that the government is confident the country will reach the 6.5% percent target set for 2013 without the need for further austerity measures. Unemployment dipped to 26.2% in the second quarter of this year due to summer hiring.

The strengthening exports and an improvement in household spending show that the country is finally coming out of a recession. But de Guindos emphasised that “this does not mean [Spain] has come out of the crisis.”

Since taking office in late 2011, the conservative government has vowed to reverse the country’s budget deficit. It has imposed budget cuts and tax hikes to achieve this.

The minister said “A year ago, Spain was a problem for the European economy and the world economy. Now it is not.”

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