More jobs, a stronger economy, a robust construction industry and soaring tourism will all positively shape Spain in 2018.

More jobs, a stronger economy, a robust construction industry and soaring tourism will all positively shape Spain in 2018.

The eggheads at leading bank BBVA have this week increased their economic growth forecast for Spain to 2.9% after revising initial forecasts on the projected impact of the Catalan political crisis…

In October last year the farce that became the Catalan independence referendum – with knee jerk decisions and retaliations evident on both sides of the political divide – served to shake confidence in the region’s economy, with even tourism taking a hit.

This led many financial analysts and economists to suggest that any ongoing strife to emerge from the crisis could be slightly damaging to Spain’s longer-term economic growth.

Fast forward six months, however, and the picture appears somewhat rosier, with the impact from the crisis not expected to be as serious as first feared.

As a result, BBVA bank believes that Spain’s GDP will increase by 2.9% this year, an increase from its previous projection of 2.5%. This improved outlook even exceeds the Spanish government’s forecast by 0.2%.

Looking farther ahead, BBVA also expects growth to continue into 2019, reaching between 2.5 and 2.7%, which is also higher than previous forecasts.

It is not only the easing of the political turmoil of Catalonia that is the reason for such optimism: Spain’s unemployment rate has fallen encouragingly so far in 2018, with BBVA expecting the rate to have dropped by around 1.4% by the end of the year as the economy strengthens and thousands more Spaniards are able to find secure employment.