MADRID. AFP.- Spain left behind the crisis in 2014 with an economic growth of 1.4% but recovery still seems distant for many Spaniards who suffer from high unemployment at the beginning of a frenzied election year. The Spanish economy broke five years of recession or no growth in 2014 and became one of the most dynamic of the euro zone, only behind Germany and Ireland. According to a first estimate published Friday by the National Statistics Institute (INE), the increase of the Gross Domestic Product (GDP) accelerated to 0.7% in the fourth quarter, which achieved an annual growth of 1.4%.
The figures coincide with the estimates of the Conservative government. “It’s a good thing that shows that the growth rate is accelerating,” celebrated the Secretary of State for Economic, Inigo Fernandez de Mesa, on public television TVE. Madrid forecast growth of 2% this year but Economy Minister Luis de Guindos, announced that the estimate could be improved in April to 2.5%. Very energy dependent, Spain benefited from the fall in oil prices and a more favorable exchange rate of the euro.
Taxes
The descent taxes on individuals and businesses coming into force this year should support this positive trend, estimated in a report Raj Badiani, an analyst at IHS. But the country still suffers from massive unemployment reaches 23.7% of the workforce. Among the under 25s, the figure is even more dramatic 51.8%. Although companies started creating jobs, this recovery should not stand in “an increase in temporary and low-wage contracts,” said the analyst.
Deflation
The second challenge for the Spanish economy is the threat of deflation, a symbol of that recovery is not as solid as it seems, according to Jonathan Loynes, economist at Capital Economics. “Spain remains one of the weakest by your activity level economies,” he said, stressing that its GDP is about 6% lower than in 2008. Consumer prices fell in January for the seventh consecutive month by 1.5% yoy .
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