Brussels expects the Spanish economy to double the growth of the EU this year

by time news

2023-05-15 10:52:24

The European economies continue to show their strength in the midst of a “complex” global scenario. The European Commission’s Spring Economic Forecast shows “moderate growth” and “better than expected” for the European Union (EU). According to the document presented this Monday, Brussels expects the economies of European countries to grow by 1% this year and 1.7% in 2024. In the case of Spain, one of the powers that has grown most strongly in recent months, it could almost double the European average this year -with an increase in GDP of 1.9%- and 2% in 2024.

The Ministry of Economic Affairs has positively assessed the Brussels forecasts, which revise the economic outlook for Spain upwards. The country “will be one of the fastest growing” this year, which “will allow it to lead growth among the main economies of the euro zone,” ministry sources have pointed out. Another of the positive news is found in the fall in public deficit and debt, which “will continue to fall in Spain above the European average, continuing the fiscal consolidation process started after the pandemic.”

The First Vice President and Minister of Economic Affairs, Nadia Calviño, announced that the Stability Plan that the Government sent to Brussels includes reducing the deficit to 3% of GDP in 2024, one year ahead of schedule. All in all, the European Commission’s calculations suggest that the Spanish public deficit will stand at 3.3% next year, above the 3% set by the Stability Pact -which will be reactivated next year- and contains procedures against Member States that do not comply with the established requirements.

The Commissioner for the Economy, Paolo Gentiloni, stressed that growth projections for Spain are “positive” and that “despite the differences in deficit forecasts, we have good forecasts.” In general terms, he has pointed to the “great national inequalities” shown by the forecasts of the European Commission. «We must prevent these differences from becoming chronic. This shows the need for a more specific approach in European tax rules and is an incentive to reach an agreement before the end of the year », he pointed out. The Community Executive proposes roadmaps tailored to each European country, which must commit to a minimum fiscal adjustment of 0.5% of GDP each year. In the case of Spain, this would mean a reduction of 6,000 million euros a year in debt and deficit.

Brussels points out that the fall in energy prices have improved the economic prospects of the EU. Preliminary data published by the European Statistical Office (Eurostat) indicate that, in the first quarter of the year, GDP grew by 0.3% in the EU and by 0.1% in the Eurozone. Inflation continues to remain at “excessively high” levels, especially the underlying rate, but it is expected to decrease “gradually”. Core inflation is expected to hold at an average of 6.1% this year, before falling to 3.2% next year.

Despite the adverse situation, the Community Executive expects the labor market to remain strong in the face of the economic slowdown. More specifically, he expects the employment rate to grow by 0.5% this year, before slowing to 0.4% in 2024. Still, the unemployment rate will remain close to 6%, at record lows.

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