Eurozone crisis is taking its toll on Spain

The analysts’ consensus at Funcas (Federated Savings Banks for Economic and Social Research) says that the Spanish economy will grow by 1.3% this year and  2% in 2015. In both cases, estimates are in line with the Government’s. Be that as it may, forecasts for next year are much more optimistic than the 1.7% forecasted by the IMF, OECD or the European Commission.

The most troubling data are focused on the labour market, which has been unable to recover. The unemployment rate for this year is at 24.5%, with a fall of just 1.5% expected in 2015, which will leave the ratio at 23%, still an alarmingly high figure.

Spanish minister Luis de Guindos said this week that  GDP evolution in the fourth quarter will be “very similar” to that seen in the third. He stated that the depreciation of the Euro and the plummeting price of raw materials will be an extra boost for the Spanish economy in the months ahead. There is little doubt that these external variables can give the Spanish economy a little push, but it would be counterproductive to think that the depreciation of the Euro and  oil prices will help overall GDP. It would be more logical to focus efforts on impelling new policies that encourage investment in the Eurozone and allow for credit lending to reach the real economy.

The Eurozone crisis will be one of the main topics at next weekend´s G-20 meeting. US Treasury secretary Jack Lew has warned Europe that it risks a “lost decade”, expressing his frustration at Europe’s unwillingness – in particular Germany’s – to use fiscal policy.

About the Author

Francisco López
Working for more than 25 years in the world of journalism and communications, Francisco has gained valuable experience at several well-known newspapers such as El Mundo and La Vanguardia. He specialized in economic and financial news before making the leap to the corporate communication sector where he has held several positions: Adviser to the Ministry of Economy, Director of the Bank of Spain’s Communication Department, in addition to his consultancy role at Analistas Financieros Internacionales, where he currently works.

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