Gemma Garcia Brosa via The Conversation | On October 7, Spanish PM Pedro Sanchez presented the government’s Plan for Recovery, Transformation and Resilience to access the resources of the European programme Next Generation EU and stated that 800,000 jobs will be created. The Spanish economy is undoubtedly capable of generating that number of jobs within three years. In fact, on average, more than 400,000 jobs have been created in Spain each year in 2014-2019. But does this target seem realistic now?
spain job creation
The Government has set a target of creating 800,000 jobs over the next 3 years (in the period 2021-23). To achieve this goal, it will use 72 billion euros from the European Reconstruction Fund (60 Bn in the form of non-refundable transfers and 12 Bn as loans with conditionality, out of a total of 140 billion). It is foreseen that 37% of the funds will be earmarked for green investments and 33% for digital transformation. As a result, it is estimated that these areas will contribute +2.5 pp to GDP growth.
The European Commission (EC) urged the Spanish government to “carefully” evaluate the potential impact of any modifications to the 2012 labour reform and to “preserve “the most positive aspects of it, which “supported solid job creation” during the recovery phase. Citing a recent study from the International Monetary Fund (IMF), it states that “the labour reforms adopted in 2012-13 in response to the crisis have played an important role in promoting a rich recovery in employment which began in 2014.”
Unemployment fell by 112,400 people in 2019, 3.4% less than in 2018, registering its seventh consecutive annual decline. This drop is the smallest since 2013, when unemployment fell by 85,400 people. The fall in unemployment was four times less in 2019 compared with 2018.The jobless rate stood at 13.78% at end-2019.
Círculo de Empresarios | The Bank of Spain forecasts that the Spanish economy will embark on a gradual path of deceleration until 2022, and therefore maintains its 2% and 1.7% annual growth forecasts for 2019 and 2020, respectively. GDP growth rests on the back of positive evolution of domestic demand owing to the healthy wealth situation of households and companies, and a monetary policy that is accommodative. In contrast, the external sector loses dynamism as growth in exports is less than imports in an environment rife with global uncertainty.
Spain ended 2017 with 611.146 more people in a job, a notable improvement on the results of the previous four years. The number of people signed on with the Social Security rose 3.4% to 18.460.201 from a year earlier.