Such good news come up along with the methodological change that National Statistics Institute (INE) is about to adopt, following EU guidelines. It would boost Spanish GDP by 2.7%-4.5%. Its main effect will be 3-tenth deficit reduction (6.6%) ess than in 2013 and up to 4 point’ reduction in the public debt related to GDP (which was of 94% in 2013).
In this reform illegal activities like prostitution, drug trafficking and smuggling will be included, although INE, unlike other countries’ statistic institutions, decided not to report the specific effect of those items. The UK publicly announced a couple of weeks ago that its GDP will rise for €12.3bn.
Spain chose not to explain figures, which shows the long way still ahead in terms of transparency. Some believe Sweden should be the role model in this matter, State is obliged to release all date in oficial websites, except secret matters classified by the law.
But the truth is the Spanish economy has seen its numbers improve without any need of methodological changes. According to Funcas, the economy will grow by 1.4% in 2014 and 2.2% in 2015. Their forecast is even more optimistic than the government’s.
The result of these better prospects, Funcas highlights, will be more investment and consumption, but mostly an easier access to financing and, a reduction in long term retail banking interest rates. Upgraded estimates respond to the better consumption and investment dynamism, but also because of financial conditions improvement in the last months, reinforced by ECB actions.
As for the labor market, the Savings Bank Foundation expects an upturn in occupation, which will grow by 0.6% in 2014 and 1.4% in 2015. That will mean 90,000 full-time new jobs this year and 220,000 in 2015, which will push occupation to keep y-o-y advances. Afi and Asempleo both believe occupation rate will approach 1.5% rates in the last months of the summer.