According to forecasts from The Organisation for Economic Co-operation and Development (OECD), Spain’s labour market will be amongst the top performers in the “Club of the rich countries,” registering the biggest advance in terms of employment in 2016 and overcoming the negative trend seen during the crisis. The international institution warns that a new recession could take Spain by surprise without having recovered all the jobs lost in the crisis.
The OECD estimates that Spain’s unemployment rate will stand at 19.3% in the last quarter of 2016, growing at 2.9% and exceeding the 1.5% forecast for the whole of the OECD countries. In 2017, this rate will drop to 17.8%. This has meant that the OECD has had to lower its previous forecasts for unemployment in 2016 (19.8%) and for 2017 (17.9%). In addition, it has ratified its latest predictions for GDP growth in Spain of 2.8% in 2016 and 2.3% in 2017.
Spain’s labour market is seen slowing down in 2017, in tandem with lower economic growth, expanding at a rate of 2.1% more or less in line with levels in Greece and Luxembourg. This is compared with a job creation rate of 2.8% for Turkey and 2.4% for Ireland. The OECD estimates that the 5.7 percentage points gap predicted for Spain in 2017 is the second largest in comparison with the employment rate prior to the crisis after Greece, with 6.9 percentage points.
Despite the fact that everything seems to point to an improvement in Spain’s labour market, unemployment will remain higher than it should be (8.6% at end-2007) and the employment rate will not reach levels prior to the crisis (59.8%). Stefano Scarpetta, director for Employment, Labour and Social Affairs at the OECD warns that “a full recovery of employment is certainly still far off – in those countries – and there is the risk that it doesn’t happen before there is a new recession.”