GDP ‘to rise to 3.4pc in 2005’

20 February 2004

MADRID – Spain’s gross domestic product is set to rise to 3.4 percent next year, a report predicted Friday.

The Centre for Economic Predictions said the GDP for 2004 would rise to 2.9 percent then carry on increasing to 3.4 percent the following year.

The report was based on various data supplied by some of Spain’s largest companies like Morgan Stanley and the savings banks La Caixa and BBVA.

Stable foreign investment and spending on housing, which had caused more jobs to be created, were important factors which will push up the GDP, the study said.

Other reasons for the healthy economic prediction will be an expected  slow down in inflation and the strengthened  financial markets due to a fall in interest rates.

The report said prices were expected to go up by 2.5 percent this year and then by 2.2 percent in 2005.

However, other analysts have predicted that price rises will be slightly higher, at 2.8 percent for 2004 and 2.7 percent next year.

The study added that it expected there would be a slowdown in the rise of the GDP in the United Status from 4.6 percent this year to 3.6 percent in 2005.

It compared this with other major advanced economies like Japan, where the GDP should rise by 2.1 percent this year, but then only increase by 1.6 percent next year.

In Britain, the report said the rise would decrease by 0.2 percent from 2.8 percent this year to 2.6 percent in 2005.

Germany would show an increase of 1.8 percent this year then 1.6 percent next year.

[Copyright EFE with Expatica]

Subject: Spanish news