Economy stagnation in Spain reduces job creation

The Spanish economy is suffering serious complications and not a slight cooling as the government of the day has announced, creating a slowdown in the economy limiting the labor market. The Bank of Spain ensures that the rate of job creation has plummeted in half, which is why the agency reduces the growth of the Spanish economy but also makes its forecasts worse in the future.

The financial agency estimates that the Gross Domestic Product (GDP) will rebound 2% in 2019, a figure that contrasts with the 2.4% indicated in June by the Bank of Spain. This, which in just three months has lowered its estimate by four tenths, has become a very notable and unusual figure.

The Department of Economics and Statistics led by Óscar Arce has reduced its forecasts for 2020 and 2021 by picking up the economy by 1.7%, which means substracting more tenths from previous assumptions, while in 2021 it is expected to 1.6%, one tenth less than the previous forecast.

The reasons for the decline in economic growth in Spain, as explained by Arce, vary on the one hand in the downward revision that a few days ago the National Statistical Institute (INE) carried out the growth of the last quarters, a situation that at the same time it has caused a reduction of two tenths in the forecast of this year and on the other hand there are the tensions generated by the commercial war or Brexit, causing political instability in Spain.

Meanwhile, the Bank of Spain adds a moderation in the rate of job creation and a reduction in its estimates that cover the entire scenario analyzed and set out above. “Membership slowed between May and August, with monthly growth of 0.1%.” Between January and April, the pace had a variation of 0.2%, so “the rate of job creation has been reduced by half… In addition, the registered unemployment has stopped falling in the summer months,” showing a slowdown “somewhat more intense than expected”.

K.Villarroel

Source: elmundo