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.