GDP will return to a growth rate in 2015 and 2016 of nearly 3 percent, the same rate as before the crisis

Antonio Huertas presenta el informe del CEC

Today in Valencia, MAPFRE Chairman and CEO, Antonio Huertas, presented this organization’s growth forecast for the Spanish economy for the coming years, as found in its most recent report, “Spain 2018”.

Also speaking at the event, which was opened by the Minister for the Economy, Industry, Tourism and Employment of the Autonomous Community of Valencia, Máximo Buch, were Fernando Casado, General Manager of the Spanish Business Council for Competitiveness (CEC), the President of the Valencia Chamber of Commerce, José Vicente Morata, the President of the Valencian Association of Entrepreneurs, Vicente Boluda, and Miguel Cardoso, the Chief Economist for BBVA Research.

The CEC has published new data after revising its conclusions following the preparation of this document, “Spain 2018”, in the fall of last year, given that the cyclical momentum for the coming years is greater than that which was expected a few months ago. According to the Council, Spain’s GDP will grow in 2015 and 2016 at rates approaching 3 percent, equaling its so-called “cruising rate” prior to the crisis. This new drive comes as the result of internal momentum as well as the positive impact of several external factors, such as currency depreciation, a decline in the risk premium, and the price of oil.

The Chairman and CEO of MAPFRE, Antonio Huertas, pointed out in his address that “The reforms proposed by the CEC will intensify during this time of economic growth” and, with respect to the Valencian Community, “job creation will accelerate due to improved internal demand and the additional boost provided by exports.”

At today’s event in Valencia, Fernando Casado stated that 2.8 million jobs could be created over the next four years, which would lower the unemployment rate to 11.5 percent, a figure that is 12 points below the current rate and more in line with other European countries.

In order to achieve this, the CEC is proposing reforms in eight broad areas, to each of which it has attributed a numerical impact in terms of job creation. It believes, for example, that an improvement of the institutional framework and an increase in company size will help to reduce the unemployment rate by 4.2 percent, while improvements to the educational system could lead to lowering that rate by nearly a full percentage point. Other areas include the pursuit of best practices in the knowledge economy, energy sustainability and financial fluidity, which would contribute to a reduction of the unemployment rate by nearly 2 points.

Fields of action identified

  • An improvement of the institutional framework is essential for increasing company size and, with it, productivity-based employment.
  • Continued investment in the internationalization of Spanish firms and their inclusion in global value chains is necessary.
  • Improving the educational level of the population will considerably reduce the well-being gap between Spain and the main developed countries.
  • Acceleration of the Knowledge Economy.
  • A sustainable energy policy from an economic and environmental standpoint.
  • Maintaining infrastructure position and avoiding a drop in capital stocks
  • Fluid financing is key to the development of the country.
  • The fight against labor fraud could free up another 800,000 jobs and reduce the unemployment rate by up to 3.6 percent.
  • A realistic tax adjustment that avoids enforcement risk is key for sustaining the public debt.

The Valencian Community shows a trade surplus for the third consecutive year

The Spanish Business Council for Competitiveness reminded those present at today’s event that the Valencian Community is the now the autonomous community with the third-best trade result, based on 2014 data. The region turned into the black again during the second half of 2013, along with the rest of Spain, and that growth will be further strengthened in 2015 thanks in large measure to the recovery of internal demand.

After three years of trade surpluses – 3.7 percent of GDP – thanks to the opening up of external markets led by the industrial sector, Valencia now faces the challenge of continuing to create sustainable and high-quality employment opportunities, in order to recover jobs lost during the crisis.

To achieve this, the CEC sees positive leverage coming from exports in sectors such as the automobile industry which, as a result of new investments and productivity increases, and a more favorable exchange rate, offer exciting growth opportunities.