The credit rating agency Fitch has improved so much growth forecast as unemployment for Spain in 2014, but warns that the recovery of the Spanish economy is “still fragile”. Specifically, the rating agency has raised its forecast tenth increase in Gross Domestic Product (GDP) of Spain in 2014, from 1.2% to 1.3%, while left unchanged its forecast of 1 5% for 2015 and 2016.
Domestic demand tonew has been the engine of growth in the second quarter Fitch expects the unemployment rate drops to 24.5% this year , compared to 25% estimated so far. It has also improved its unemployment forecast for both 2015, from 24% to 23.3%, and for 2016, from 22.5% to 22.2%.
The agency stresses that Spain was the only one of the four big economies where eurozone recovery strong in the second quarter when he grew six tenths, two more than 0.4% of first three months of the year and four more than the 0.2% expected by Fitch.
In this regard, he explained that the domestic demand has been again engine of growth in the second quarter and added that household spending will push up GDP in the second half of the year, supported by rising employment. By contrast, notes that, due to the “still uncertain” foreign demand perspective, the contribution of exports will be lower in coming quarters than it expected.
It also adds the low inflation suggests that, despite the positive momentum of domestic demand, recovery of the Spanish economy is “still weak” , although I expected pressures inflationary rebound in the second half of 2014 In this context, the agency has decided not to change its inflation forecast for 2014 and 2015, at 0.2% and 0.5%, while 2016 has reduced from 1% to 0.8%.
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