IBERSOL Annual Report 2018

ANNUAL REPORT 2018 Economic growth could, however, be thwarted by the eventual increase in interest rates, which will have a negative impact on spending by fami- lies and companies. The ratio of public debt in terms of percentage of GDP decreased from 130% in 2014, to around 121% in 2018, but remains very high, influencing budget policy. Estimates place the average inflation rate for 2018, measured by the Harmonised Index of Consumer Prices, at 1.4%, which is lower than the general Euro Zone, and is expected to remain stable in 2019 and 2020. Situation in Spain Recent OECD figures indicate that Spain’s GDP grew 2.6% in 2018, with more moderate growth of 2.2% and 1.9% expected for 2019 and 2020, respectively, in a context where the main driving force for growth is in- ternal demand, resting on low interest rates and a rise in employment. The structural reforms which were undertaken and the improvement in productivity provide solid foundations for recovery and a balanced ex- pansion of the economy, but at a lower rate than over the past three years, in which it was equal to, or over 3%. In the short run, this backdrop of growth is strongly linked to the rate of growth in Europe, the main market for Spanish exports. 27