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Spain to “maintain strong growth in 2019”, say forecasters 

PAGE 18 Spain to maintain  strong growth in 2019

The Organisation for Economic Co-operation and Development and the European Commission forecasts point to Spain maintaining strong growth in 2019.

The forecasts by the two bodies on the Spanish economy are in line with those of the government. Both the European Commission and the OECD forecast that Spain will maintain strong growth, higher than the European Union average, of 2.6% for this year and of 2.2% for next year, just 0.1% lower than the govern-ment’s forecast.

Both bodies forecast a significant decline in the deficit in 2019. The OECD’s forecast coincides with the govern-ment’s estimation of a 0.9% reduction and a deficit of 1.8% of GDP. For its part, the European Commission fore-casts that the deficit will fall by 0.6% to 2.1% of GDP. In both cases, these are much higher reductions than for the other large EU economies.

As the European Commi-ssion acknowledged, its forecast is “cautious” because Spain has still not presented the General State Budget. It must be taken into account that this ex ante phase of fiscal supervision evaluates the Plan, which justifies the prudence of its analysis.

The figures contained in the Plan submitted by the Government of Spain are within the margin of flexibility provided for in the Stability and Growth Pact. As Vice-President Valdis Dombrovskis pointed, the difference in the calculation is due to the fact that “it has not been possible to take into consideration all the measures that have not been legislated on”. To the same end, Commissioner Pierre Moscovici pointed out when the autumn forecasts were published that in this phase of the fiscal supervision cycle, it is absolutely normal for there to be a certain divergence between the estimates of different bodies.

At any event, Spain will come out from under the corrective arm of the Stability and Growth Pact in 2019, in other words, it will exit the Excessive Deficit Procedure. The evaluation by the European Commission of the Spanish Budget Plan responds to greater demands under this preventive arm in line with those made on other coun-tries, such as France, Belgium, Portugal and Slo-venia.