Europe believes that Spain will meet in 2016, but sees it difficult in 2017 – Investing.com Spain

MADRID (Reuters) – The European Commission raised on Wednesday its projections of growth of the Spanish economy and said that the country will fulfill its commitment to reduce the public deficit to 4.6 percent of GDP this year, but cooled at the same time the expectations for 2017, which will require new measures of adjustment.

In its report of autumn forecast presented on Wednesday and filtering at the first time of the day for The Country and The World, the Commission highlights the strength of the economy this year and raised its projection to 3.2 percent, from 2.6 percent expected in the spring.

In this context, endorses the thesis of the minister of Economy, Luis de Guindos, the country will meet its public deficit goal of 4.6 percent of GDP at the end of the year.

“The economic growth has again exceeded expectations in recent quarters,” said the European Commission to add that although domestic demand will remain the main impetus of the economy, the contribution of the external sector will be added.

however, despite the fact that the own Guindos said on the eve that the government will probably retocará upward its projection of GDP in 2017, the Commission now believes that the national economy will grow 2.3 per cent expected by Spain until now. Europe believed in its projections for spring growth two-tenths higher.

“The growth is expected to decelerate to a still relatively robust 2.3 per cent in 2017 and to 2.1 per cent in 2018,” said the Commission to add that projects a decline in private consumption in the measure in which they also grow slightly less employment and will be removing the winds from the queue.

The Commission also takes it for granted that, in the absence of Spain to present a new budget with measures to reduce the deficit, the country will be in breach of the public deficit goal next year.

Brussels believes that the devaluation in fiscal 2017 will continue at 3.8 per cent, still eight tenths above that of the commitment and explains that the country relies still much on economic growth to reduce its imbalance.

“The reduction of the deficit of the public administrations in 2017 and 2018 depends largely on the macroeconomic outlook positive,” said the Commission.

The minister Guindos, who has agreed with the european partners to meet the goals, has already said that an economic growth larger than expected in the macroeconomic picture would help reduce the deficit at the margin of new measures.

The projections for europe point to an increase in consumer prices, that would be a negative rate of 0.4 per cent in 2016 to a positive 1.6 percent in 2017, in large part, by a predictable rise in energy prices.

With regard to employment, the Commission is expected to continue to drop the unemployment rate but at rates more moderate.

With unemployment rates provided from 23.5 per cent in 2016 and 22.2 per cent in 2017, the analysts of the Commission’s projected growth of employment of 2.8 per cent in 2016, and 2.1 percent in 2017 and 1.8 per cent in 2018.

In its projections for the whole of the eurozone published on Wednesday, the agency said that it expected the growth to slow down next year as its main engine, the internal demand, will lose strength as a result of a likely increase in energy prices, while inflation could rebound.