Spain projection note OECD Economic Outlook November 2023

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Spain GDP is projected to grow by 1.4% in 2024 and 2.0% in 2025. Domestic demand will be the key driver of growth. Private consumption and investment growth will moderate due to tight financial conditions and persistent inflation in 2024, before picking up in 2025. External demand will be less supportive of growth than in previous years. Inflation is projected to slightly increase to 3.7% in 2024, before decreasing to 2.3% in 2025. The fiscal deficit is falling over the projection period, but stronger and sustained fiscal consolidation is needed to keep debt on a downward path and create space for ageing-related and growth-enhancing spending. To increase productivity and innovation, efforts should be targeted at fostering R&D projects through partnerships between firms and research institutes, and reducing regulatory differences across regions. The economy is slowing GDP increased by 0.3% in the third quarter of 2023. Business confidence indicators have been sluggish since the spring and business activity surveys show weaker developments across sectors since July. Consumer confidence remains low. The labour market is robust, with employment growing at an annual rate of 2.6% in October, reflecting a higher employment rate and the incorporation of immigrants in the labour force. The unemployment rate increased to 11.8% in September 2023. Nominal wages increased by 4.3% over the year to the third quarter of 2023. Inflation has moderated significantly but increased from 2.1% in July 2023 to 3.5% in October, driven by higher energy prices and base effects. Core inflation has gradually moderated, reaching 3.8% in October 2023.

Spain

Source: Instituto Nacional de Estadistíca; Eurostat; and OECD Economic Outlook 114 database. StatLink 2 https://stat.link/fwldin

OECD ECONOMIC OUTLOOK, VOLUME 2023 ISSUE 2: PRELIMINARY VERSION © OECD 2023


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Spain projection note OECD Economic Outlook November 2023 by OECD - Issuu