The European Commission has increased its growth prediction for Spain to 2.8% from its previous forecast for 2.3% in February. It has also estimated that the public deficit will end the year at 3.2% of GDP. This is an improvement of three-tenths of a point on its previous forecast, but is still one tenth higher than the objective agreed with the European Union. The EC’s “spring predicitions” also include an increase in GDP growth, to 2.7%, which is even higher than the government’s forecast. That said, Brussels believes the Spanish economy’s expansion will slow to 2.4% in 2018.
According to the EC’s report, private consumption will remain the main driver of economic growth, although this will slow as the pace of job creation decreases and other factors which supported the improvements in households’ disposable income, like the fall in oil prices, lose momentum. In any event, Brussels flags that Spain continues to grow above the eurozone average and that this year GDP growth will exceed its highest pre-crisis level. The report also highlights that the recovery is supported by “more balanced” growth than in the years prior to 2008.