May 22th 2024 | 3:44

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Spain leads economic growth in the euro zone and revises upwards its forecasts for 2024

Jesus Carames

May 14, 2024 | 6:00 p.m.

The Government of Spain has presented a macroeconomic situation report that highlights the country's leadership in economic growth within the euro zone. This report, published on May 14, 2024, highlights not only the strength of GDP growth, but also a series of measures and strategies implemented to ensure sustainable and balanced development in the coming years.

Spain stands out among the main economies of the euro zone

According to the report, Spain has led economic growth in 2023, surpassing France, Germany and Italy. With a GDP growth of 2,5%, Spain is positioned at the head of the most important economies in the euro zone. This positive trend is expected to continue in 2024 and 2025, with growth forecasts of 2% and 1,9% respectively.

Upward revision of growth forecasts for 2024

The report reveals that various analysts and national and international organizations have revised upwards their growth forecasts for Spain in 2024, converging towards the Government's estimate of 2%. This revision is largely due to the increase in turnover in commercial and matchday income, as well as the moderation in the cost of sports staff and a higher expected return on operational investments made by clubs in 2023.

The labor market as the backbone of economic growth

The report also highlights job creation as a key factor for economic growth. Since before the pandemic, Spain has registered a significant increase in Social Security affiliation, with more than 1.662.520 additional affiliates. Since the labor reform, 1.286.800 members have been added and 230.400 since the beginning of 2024. This positive trend reflects the strength of the Spanish labor market and its ability to generate employment in a sustainable way.

A growth model that generates confidence among investors

Spain's economic growth has been accompanied by an increase in investor confidence. Between 2018 and 2023, Spain has been one of the main destinations for greenfield projects in the world, demonstrating investor confidence in the Spanish economy. Furthermore, the public deficit has shown a decreasing trend, standing at 3,6% of GDP in 2023, with forecasts of reduction to 3% in 2024 and 2,5% in 2025.

Fiscally responsible growth

The report highlights that Spain's economic growth is compatible with a moderation in inflation, which allows an increase in household purchasing power. From the fourth quarter of 2019 to the fourth quarter of 2023, real disposable income per household has increased, rising above the pre-pandemic level. This moderation in inflation has contributed to improving the purchasing power of Spanish families, which in turn boosts consumption and economic growth.

Recovery Plan: more than 50% of the funds from the first phase executed

The Spanish Recovery Plan has been fundamental in promoting economic growth and the modernization of the country's productive structure. More than 50% of the funds from the first phase of the plan have already been executed, which has allowed the creation of jobs in key sectors such as tourism and leisure services, social services, health and education, and construction. Furthermore, real productivity per hour has shown a positive trend, reflecting an improvement in the efficiency and competitiveness of the Spanish economy.

Conclusion

The macroeconomic situation report presented by the Government of Spain reflects an optimistic outlook for the country's economy. With leadership in economic growth within the euro zone, an upward revision of growth forecasts for 2024, and a robust labor market, Spain is well positioned to continue its path of sustainable and balanced growth. Furthermore, investor confidence and a fiscally responsible approach contribute to consolidating this positive trend, ensuring a promising future for the Spanish economy.

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