Economy to expand by2.7pc, experts claim

19 January 2004

MADRID – The Spanish economy could expand by up to 2.7 percent during 2004, experts claimed Monday.

Three hundred economics specialists were polled by accountants Price Waterhouse Cooper about prospects for the coming year.

They referred to earlier predictions in March last year in which experts said the Spanish economy would expand by 2.41 percent in 2004.

By May 2003, experts’ predictions were more optimistic, with a 2.46 percent expansion expected this year.

The figure rose again until experts believed the economy would expand by 2.7 percent in the next 12 months.

At the same time, the analysts believed that by the spring the economic expansion will be “clearly visible”.

Almost all of those canvassed (86.7 percent), believed this would continue throughout the year.

The experts also had optimistic forecasts about inflation.

Nearly half of those asked, (45 percent) believed that by June 2004, inflation would fall below 2.5 percent. The current rate of inflation in Spain, announced last week for 2003, is 2.6percent.

But more of those questioned (56 percent) believed that by December, inflation would fall to below 2.5 percent.

More than half believe that by June, the euro will be under USD 1.20. It fell in recent weeks to just above this level.

Asked about potential changes for the construction industry, nearly half the analysts said that demand for houses would increase.

But at the same time, 45 percent said there would be a “smooth and ordered” fall in the numbers of houses on the market.

According to more than three-quarters of those polled (78 percent), there will be a change in the price of houses which will affect the market but this is not expected to have a serious effect on the Spanish economy.

[Copyright EFE with Expatica]

Subject: Spanish news