Year 2016
Situation in Spain
In 2016, the Spanish economy grew by around 3.2%, in line with the pre-
vious year, benefiting from the strong contribution from external demand,
which could be seen in the increase in exports, which offset the reduction
in domestic demand arising from the slowdown in investments in the ma-
nufacturing and construction sectors.
The Bank of Spain’s most recent projections indicate that the economy will
expand less in the next few years, and GDP should reach a growth of 2.8%
in 2017, 2.3% in 2018 and 2.1% in 2019.
Economic recovery is based on the dynamics of the job market, which
should grow by 2.6% in 2017, and by around 2% in the following years, and
it is expected that the unemployment rate will stand at 14% at the end of
2019. The expected slowdown in the growth of the economy is the result of
the predictable increase in the price of oil and of a less expansive budge-
tary policy, although it should remain higher than the average for the EMU.
In the mid-term, all indicators are showing signs of a sustained mainte-
nance of the growth in the economy, benefiting from the corrections to
structural imbalances and the improvement in competitiveness, while con-
tinuing with the process for restoring the main macro-financial balances.
Of particular note is the Spanish economy’s decrease in its dependence
on imports, replacing some imported products with domestic production,
which if confirmed, will contribute towards mitigating the negative effect
of the recent rise in the price of crude.
At the beginning of 2017, there was an increase in the inflation rate, due
to the increase in the prices of electricity and oil, an effect which till tend
to gradually disappear over the course of the year, the average CPI in 2017
being estimated at 2.2%, decreasing to around 1.5% in the following years.
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