International media and global financial firms, as well as Spanish authorities, confirm that the Spanish economy, though still experiencing difficulties, is likely to overcome recession in the third quarter of 2013:
Morgan Stanley issued a Report on September 9th entitled “The new Spain” in which the company forecasts that the Spanish GNP will grow between 0 and 0.1% in the third trimester of 2013. According to this Report:
- Spanish GDP will grow -1.3% in 2013, +0.8% in 2014 and 1.1% in 2015.
- Spanish internal demand will contribute to this growth by -3.2% in 2013, -0.5% in 2014 and +0.2% in 2015.
- Spanish external demand will contribute to this growth by +1.8% in 2013, +1.3% in 2014 and +0.9% in 2015.
- Spanish public deficit evolution will be -6.9% in 2013, -6% in 2014 and -5.3% in 2015.
- Spanish public debt will reach 91.4% in 2013, 96.2% in 2014 and 99.1% in 2015.
- The Spanish unemployment rate will reach 27.1% in 2013 but will decrease to 26.7% in 2014.
The Spanish Minister of Economy and Competitiveness recently made such a statement to the international media (Financial Times, i.a.) and estimated that the Spanish economy will grow between 0 and +0´2% after nine consecutive trimesters of negative growth (since the second trimester of 2011). The Spanish Minister underlined that the economic recovery will be “incipient and fragile”, but announced that the Government will revise upwards the economic growth forecast of 2014 –which now is +0.5%- and will revise downwards the unemployment rate –which now is 27.1%. Such a revision will take place in the macroeconomic framework of the General Budget of the State of 2014 –which will be submitted in September.
The Spanish Ministry for Economy and Competitiveness published in September a Report on “Spain´s Structural Reform and Economic Policy Programme”. This Report outlines the main forecasts of the Spanish Government for the period 2013/2014, namely:
- Spanish GDP will grow -1.3% in 2013 and +0.5% in 2014.
- Spanish internal demand will contribute to this growth by -3.6% in 2013 and -0.6% in 2014.
- Spanish external demand will contribute to this growth by +2.3% in 2013 and +1.2%.
- Spanish public deficit evolution will be -6.5% in 2013 and -5.8% in 2014.
- Spanish public debt will reach 91.4% in 2013 and 96.2% in 2014.
- The Spanish unemployment rate will reach 27.1% in 2013 but will decrease to 26.7% in 2014.
In conclusion, should the forecast of the Spanish authorities and of the International media and financial firms be confirmed, the third trimester of 2013 will constitute the turning point that will mark the end of the longest recession of the Spanish democracy (9 consecutive quarters) and the beginning of economic recovery. It could also represent the beginning of a new economic model (the “new Spain”, according to Morgan Stanley) based on external instead of internal demand.
Please find attached the relevant documents.
Best regards,
Javier Garrigues
Ambassador of Spain