|The recovery is projected to strengthen gradually over the next two years. The improving labour market and stronger confidence will aid private consumption. Investment will pick up as prospects improve. Export performance will keep improving boosted by competitiveness gains. The unemployment rate should decline gradually as growth picks up, but will remain high through the projection period. Spare capacity will keep wage growth down and price inflation very low.
To stop and eventually reverse the rise in public debt relative to GDP, the government needs to achieve its medium-term fiscal plan. Improving public employment services and training for the unemployed must be a priority to further reduce unemployment. Spain’s medium-term growth potential would be boosted by further efforts to raise the quality of innovation, strengthen competitiveness and facilitate the creation and growth of firms.
Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.