Spain’s economic outlook improved as impact of Catalan crisis contained, says Brussels
European Commission now expects GDP to grow 2.9% this year
The European Commission (EC) has improved Spain’s economic outlook for 2018 and 2019, stating that the consequences for growth of the political crisis in Catalonia “have so far remained contained.” In the European Economic Forecast paper for spring 2018, the EC expects Spanish GDP to increase by 2.9% this year, and 2.4% the following one—with both figures 0.3 points higher than the previous forecast last winter.
Spain’s GDP grew 3.1% in 2017, thus surpassing the European average for a third year in a row. According to the EU, private consumption remained the most important growth driver in Spain, with investment—particularly residential construction—performing better than anticipated. Net exports contributed to economic growth, but less than expected.
The EU paper states that measures contained in the 2018 draft budget support the growth forecast. The unemployment rate, currently at 16.7%, is set to continue its decline. According to the EU, the figure could drop below 14% by 2019, the lowest level since the onset of the financial crisis in 2008.