Spanish growth expected to slow in 2007 to 2.8pc

8th May 2006, Comments 0 comments

8 May 2006, BRUSSELS — Spain's economy will expand 3.1 percent in 2006, with growth slowing down slightly in 2007 to 2.8 percent, said the European Commission.

8 May 2006

BRUSSELS — Spain's economy will expand 3.1 percent in 2006, with growth slowing down slightly in 2007 to 2.8 percent, said the European Commission.

Spain's projected 2006 growth is a full percentage point over that predicted for the euro zone by the commission.

The EC expects prices to rise about 3.6 percent in the Iberian nation this year, or 1.4 percent more than in the euro zone.

Inflation, however, should drop in 2007 to 3.1 percent, with a differential of 0.90 points with the euro zone, according to the projection.

Job growth will continue to be strong in Spain, but it will moderate with respect to 2005, posting advances of 2.7 percent in 2006 and 2.2 percent in 2007, according to Brussels.

The unemployment rate is expected to fall to 8.3 percent, only one-tenth of a percentage point more than in the European Union and the euro zone.

The EC predicted that the euro zone would grow 2.1 percent this year, while the economy of the 25-member European Union as a whole would expand 2.3 percent.

In 2007, assuming no change in policy, growth should be slightly lower, coming in at 1.8 percent in the euro zone and 2.2 percent in the EU, the commission said.

Inflation should remain stable this year at 2.2 percent in the euro zone and 2.1 percent in the EU, despite the spike in the price of oil, which continues to pose the biggest risk to growth, the commission said.

The commission's projections are based on an average price for benchmark North Sea Brent oil of USD 68.90 per barrel in 2006 and USD 71 per barrel in 2007, which includes a risk premium for geopolitical tensions and could vary sharply both higher or lower.

[Copyright EFE with Expatica]

Subject: Spanish news


0 Comments To This Article