IMF Predicts Greater Economic Improvement for Spain in 2017

Spain has to be the best place to live in the EU and has so much 

going for it.

The International Monetary Fund (IMF) upgraded the economic outlook for Spain this week based on the explosion of the tourism sector, strong export market, and growing demand from domestic consumers.

The Spanish economy is now expected to grow by 3.1% according to the IMF. It’s last forecast from April suggested the Spanish economy would grow by 2.6% in 2017.

The upgrade means that Spain is one of the leaders of the EU when it comes to economic success and growing GDP. The IMF added that it was impossible to rule out the idea that Spain might be upgraded again later in the year, especially if more records are broken in the tourism sector this year.

It’s more than just the perpetual attraction of the country for holidaymakers that is boosting the Spanish economy. The IMF were also keen to praise how the government’s reforms in the economy and labour market created momentum, stressing the growing consumer confidence and demand. Altogether, it could create a virtuous circle where money is spent, jobs are created, and the economy expands.

While the government should be trying harder to tackle the problems of youth unemployment and wage suppression, the performance of the Spanish export sector shows the quality of the standards and the competitive nature of Spanish industry according to the IMF.

Spanish GDP rose by 3.2% last year, with growth of over 2.5% in 2015. When it comes to 2018, economists believe that the Spanish economy will continue to grow, especially as the construction and property sectors continue to grow and offer their support.

Spanish Economic Growth Better than German Economic Growth

Spanish Economic Growth Better than German Economic Growth

The resurgence of the Spanish economy that began in 2015 is continuing in 2016. Data from the Markit Composite PMI index over the weekend showed that the Spanish GDP grew by 0.6 in the first quarter of 2016.

Great news for Spain as it continues to make progress

The average growth for the Euro area was 0.3% in the first quarter. Germany saw a growth of 0.4% which means that the Spanish economy grew more than Germany, Italy and France. Most of the European countries experienced lacklustre growth overall.

The index shows that the Spanish performance of 55.1 PMI in March was better than the forecasts predicted. It even performed better than Bloomberg predicted. Bloomberg urged Spanish leaders to approximately number the shoots of recovery of last year.

It seems like this is what is happening even though the country is going through tough a rough political climate at the minute. It looks like there will be a re-election in June unless the problem is solved and a leader emerges.

This political turmoil hasn’t damaged the job market however or the continues growth of the real estate property market and cities of Spain in March saw more than 50,000 jobs created and led to a drop in Spanish unemployment for the second month in a row.

More data was published last week to show that the cost of living in Spain was stable and the service sector in Spain reached a four-month high in March. Spain did a good job this year of avoiding the typical post-Christmas slump that can affect the employment figures in the service sector.

Spanish Economic Recovery Leads to Higher Wages

Spanish Economic Recovery Leads to Higher Wages

The Spanish Institute of National Statistics has released data that shows Spanish wages have risen by almost 2%. This is the first rise of this magnitude in over a decade.

The cost of living in Spain is stable and the average gross salary in the final quarter of 2014 was €2,026.14 per month. This was just under 2% higher than it was for the last quarter of 2014.

Wages are slowly increasing in Spain

This rise is the largest rise in wages seen since 2000 when this particular statistic was reported annually. When you add in the negative inflation which has pushed down the consumer price index by 0.8% it looks like Spanish workers have a 2% rise in their spending power.

Madrid is where the wages are currently the highest, followed by the Basque Country and Catalonia. Valencia is where wages are currently the lowest in Spain. There the wages are almost 700 euros less than in Madrid.

In terms of percentage rises the biggest wage rise happened in the Canaries. They experienced a 4.6% wage increase. The Castilla y Leon region saw the second highest with 2.7%.

The debt ratio for Spain also went below 99% in the final quarter of 2015 according to the Bank of Spain. This was a great indication that the plans to reduce public borrowing are working. There is still a large average debt load per head in the country but this is expected to fall during 2016.

The conclusion of this report confirms that Spain is recovering in all sectors especially in the property market where buying property in Spain has seen continual growth over the past year and looks like it will continually do so, not just from foreign buyers but by Spanish nationals buying property again in spain.