"THE EUROPEAN COMMISSION RAISES THE GROWTH FORECAST FOR SPAIN TO 2.8% THIS YEAR"

                                
The European Commission has improved its forecast of growth for Spain in half a point in 2017, to 2.8%, from the 2.3% it estimated in February, while calculating that the public deficit will close the year by 3.2 % Of GDP, which represents an improvement of three tenths of the previous calculation but is one tenth higher than the target agreed with the European Union.
In this way, the "forecasts of spring" of the Community Executive pick up a GDP increase for this year that is even higher than the government forecast of 2.7%. Brussels believes, however, that the expansion of the Spanish economy will be reduced to 2.4% in 2018.
According to the report, private consumption will continue to be the main source of growth for the Spanish economy, although it will slow down as the pace of job creation slows and other factors that support improvements in disposable household income, such as the fall of oil prices.
Brussels underlines that Spain continues to grow above the Eurozone average and its GDP will surpass this year its highest pre-crisis level.
Commissioner for Economic and Monetary Affairs, Pierre Moscovici, explained that the 0.8% increase in GDP in the first quarter "implies a greater growth momentum" than that foreseen in winter.

PUBLIC DEFICIT

Specifically, the European Commission has reduced its public deficit forecast by 3.2% of GDP by three tenths, one tenth above the 3.1% target set for 2017. This revision, Brussels explains, is due at the same time to the measures approved by the Government in December last year, to an improvement in financing conditions, which imply a decrease in interest payments, and to the better macroeconomic scenario, which Should support tax revenues and reduce spending on unemployment benefits.
By 2018, the deviation would be 2.6% also above the target for next year (2.2%), but would still be below the 3% barrier.

UNEMPLOYMENT RATE

With respect to the unemployment rate, the European Commission estimates that it will be reduced by 17.6% this year and will fall below 16% in 2018 (15.9%), its lowest level since 2009. In this sense, Brussels points That although employment growth will slow down this year and the next, it will remain "strong" and will allow further falls in the unemployment rate.
Brussels also expects wages to continue to grow "moderately" this year, a scenario that, together with low productivity gains, would lead to increases in unit labor costs.
 
INFLATION AND DEBT

Regarding inflation, the EC executive expects prices in Spain to grow 2% this year, an increase that will be reduced to 1.4% in 2018. Core inflation will recover "gradually" for The next two years.
Finally, the European Commission estimates that the debt will be reduced by two-tenths by the end of this year, from 99.4% of GDP in 2016 to 99.2% that includes the forecast for 2017. The reduction will accelerate in 2018 , When the public debt would stand at 98.5% of GDP.

• Rocío Adame and Marina Pérez