Spain will lead in economic growth and job creation this year, say world bodies

There was good news for Spain on Thursday from the world’s major think tanks. After years of dire predictions, Spain is now expected to be the developed world’s biggest job creator this year and the next, while its economy will grow faster than most in 2015.

The Organisation for Economic Cooperation and Development (OECD) foresees that Spain will see a 2.9% rise in the number of jobs available this year, and 2.8% the next. Only Iceland, with an expected job growth rate of 4.1% this year, will beat Spain in aggregate terms.

After years of job destruction due to the protracted economic crisis that began in 2008, Spain now seems set to bring its soaring unemployment below the 20% mark by the end of next year. The OECD’s Employment Outlook 2015 report is positing a figure of 19.7% in the fourth quarter of 2016, although the average annual rate for next year will still be above 20%, a threshold that was reached in 2010, then comprehensively surpassed.

Other world bodies are not as optimistic, however. The International Labour Organisation (ILO) feel that Spain’s jobless rate will remain at 21.5% as late as 2019, while the International Monetary Fund (IMF) talks about 2017 as the year that Spain will fall below the 20% rate.

In any event, the OECD point out that Spain’s unemployment figure is still “one of the highest” among member states. By comparison, the average rate for OECD countries is under 7%. This body also criticises the high number of temporary jobs in Spain, where 24% of workers are on this type of contract – a figure only exceeded by Poland in the OECD community.

The IMF, however, sees Spain off as the biggest growing economy in 2015 out of a group of eight developed countries, including the United States. In its World Economic Outlook update released on Thursday, the Washington based organisation is forecasting 2015 growth of 3.1%, 0.6 points more than in its last report in April. Spanish GDP is also expected to grow 2.5% in 2016.

This is in sharp contrast with the IMF’s own prediction for Spain just a little over a year ago, when it said that the Spanish economy would inch forward a mere 0.8%. By raising its own forecast, the IMF brings itself more into line with the Bank of Spain and private analysts. The Spanish government itself is even more optimistic, talking about growth of 3.3% this year.

About Richard Lawson

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