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Brussels/Madrid – The European Commission has improved economic forecasts for Spain by raising the growth of Spanish Gross Domestic Product (GDP) in 2024 to 2.1%, a tenth above the government forecast and four more than previous forecasts. However, it has pointed to a “slight slowdown” in 2025, down to 1.9%, a tenth less than what was predicted in winter.
According to the spring economic forecasts, published this Wednesday, the Commission expects the reduction of inflation to continue to 3.1% in 2024, a tenth less than what the Commission predicted in February, and it will continue to decrease to 2.3% in 2025, two-tenths above the winter forecast.
Brussels also trusts that the unemployment rate in Spain will continue to decrease, although it will remain at a high level, reaching 11.6% in 2024 and 11.1% in 2025. Additionally, it expects the growth of nominal wages to moderate, but to be “marginally” above inflation.
In line with the forecasts of the Spanish government, the European Commission estimates that Spain’s deficit will fall to 3% in 2024, and to 2.8% in 2025, in this case, three-tenths above the national projections. However, it notes a downward path driven by favorable income developments and the gradual elimination of energy-related measures.
Thus, Brussels endorses the update of the fiscal forecasts of the government, which indicate that Spain will meet the 3% GDP target required by the new fiscal rules in 2024.
The spring economic forecasts also anticipate that the debt/GDP ratio will continue to gradually decrease from the 105.5% predicted by both the national and community executives for 2024, to the 104.8% estimated by Brussels in 2025, seven-tenths more than the government’s forecast.
The European Commissioner for Economy, Paolo Gentiloni, highlighted in a press conference that the growth of Spanish economic activity will be driven by domestic demand and supported by a “strong” labor market, while the implementation of the recovery and resilience plan is expected to “bolster” the rebound in investment.
For its part, the Government of Spain has celebrated that the Commission has revised upwards its forecast for the growth of the Spanish economy, which, in its opinion, certifies that Spain “will lead the economic growth of the euro zone until 2025”.
In the same vein, the President of the Spanish Government, Pedro Sánchez, stated on his X account, where he affirmed that the European forecasts “endorse” the economic policy of the government.
“The forecasts endorse our economic policy: growth, job creation, and fiscal rigor, improving the purchasing power of families and the competitiveness of companies. Spain is moving in the right direction,” emphasized the head of the Executive. (May 15)