08 July, 2016

By VIVA Team

Although Spain’s economic outlook has looked rosy for some time, the country’s Economic Minister Luis de Guindos this week moved to raise its growth forecast for the rest of 2016 by a further 2.7%…

According to the Minister, Spain could well be on track to surpass the 3.2% increase in annual gross domestic product (GDP) recorded in 2015 provided the current political impasse – Spain has voted on two inconclusive general elections in the space of just six months – is ended soon.

“The growth projections for this year are excessively prudent and I believe that in the next set of forecasts, which we need to set before the end of July, we will revise growth for 2016,” de Guindos said.

The Minister stressed that Spain is an increasingly good place in which to do business, citing the country’s “internationally recognised business schools, low real estate prices, good weather and solid infrastructure” as reasons why people are looking to invest in Spain.

“If we are able to form a stable government with a good economic policy agenda it is possible to exceed the growth rate we achieved last year,” he added. The recent general election saw the Popular Party (PP) once again win the most votes, but not enough for an absolute majority. However, far-left party Podemos lost votes – a performance that many interpreted as a vote for stability, and something that Prime Minister Mariano Rajoy was keen to press home.

Under his stewardship Spain has had to endure harsh austerity measures that have, nevertheless, set the country’s economy on an upward trajectory. Unemployment has fallen consistently, with many important industries – such as hospitality, service and construction – enjoying encouraging growth in recent months.

Even Spain’s banking sector – which had to rely on an EU bailout package after the last recession – has made vital strides in the right direction, with de Guindos confident that Spanish banks can act responsibly to further stabilise the country’s recovery.

“We cleaned up our banks in 2012, so there are no jitters about the Spanish banks now,” he said.