Spanish economy can absorb crude rises, says Solbes

21st October 2004, Comments 0 comments

21 October 2004, MADRID - The rise in petrol prices will affect the Socialist government's budget but the Spanish economy can absorb the effects, said Economy and Treasury Minister Pedro Solbes Thursday.

21 October 2004

MADRID - The rise in petrol prices will affect the Socialist government's budget but the Spanish economy can absorb the effects, said Economy and Treasury Minister Pedro Solbes Thursday.

But Solbes said it would mean he would have to revise his estimates for the growth of the Spanish economy.

Spain's GNP could rise from between 2.3 and 2.8 percent next year, depending on the movement of petrol prices, he said.

Solbes had previously predicted Spain's GNP should rise 2.8 percent this year and 3 percent in 2005.

He said the world had become accustomed to live with crude oil prices of up to USD 50 per barrel though this could not continue for much longer.

He said it seemed unlikely that crude prices would return to USD 30 per barrel.

Solbes said: "We are at a point now which can only carry on for some months but at some point it will have to come down."

But Solbes said he believed that even when prices fell, they would not return to the same prices of the first six months of the year.

Solbes said as part of the EU,  Spain could not reduce taxes on diesel or petrol unilaterally and had to respect EU accords.

[Copyright EFE with Expatica]

Subject: Spanish news

0 Comments To This Article