MADRID (Reuters) – The Foundation of Savings Banks (Func) on Tuesday lowered one-tenth its growth forecasts for the Spanish economy in 2016, for the shortest growth of the world economy and the situation of uncertainty, which neutralize the positive impact of falling oil prices.
Func now expects the Spanish economy to grow 2.7 percent in 2016 and forecasts growth of 2.3 percent next year.
“The negative factors will impact especially in the first three quarters, in which there will be a slowdown in growth,” said Func in a press release.
The forecast Func they are lower than the current caretaker government, which hopes that Spain, which closed 2015 with a growth of 3.2 percent, grow 3 percent in 2016.
in addition, the forecasts have not taken account of the political deadlock for the formation of a new government, which already lasts three months.
Func said that political uncertainty may differ greatly depending on how the situation develops in the coming months but warned that “is an important risk factor that could result in lower than expected economic results.”
the growth will be driven back by private consumption, by falling oil prices, job creation and the reduction of income tax, although Func forecast a slowdown of this indicator to 2.6 percent 2017, from 3.3 percent this year, by a depletion of these factors.
the savings bank foundation also expects the unemployment rate to be reduced to 19.9 percent in 2016 and 18.2 percent in 2017.
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