New projections foresee an economic growth of 0.7% of GDP

The Spanish Government has submitted the 2014 Budget to Parliament based on a new macroeconomic framework that updates the forecasts for the Spanish economy.

Framed under prudent estimates, the new projections foresee an economic growth of 0.7% of GDP, up from previous predictions, trimming the jobless rate to 25.9%.

The labour market is being stabilized and employment will start to grow by the second half of 2014, as the labour market reform allows for job creation with GDP growth rates even under 1%.

Both domestic consumption and investment will increase in 2014, although growth will still be mainly based on a strong external trade performance. Increasing competitiveness due to the labour market reform and market liberalization will enable Spain to reach an external surplus of 2.3% of GDP this year and a record high of 3.4% in 2014. This displays the end of the country’s foreign dependence for funding reflecting the deleveraging of the economy and the strengthening of domestic savings.