According to their quarterly report on the economy of the eurozone, the credit rating agency, Standard & Poor’s (S & P), predicts that the Spanish economy will grow by 0.5% in 2014, one tenth less than their July estimate, and that unemployment will continue to increase up to a maximum of 27%.
S & P has maintained unchanged the forecast for Spanish economic contraction in 2013 of 1.5%, but has improved by five tenths the unemployment rate with which the Spanish economy will close this year, from 27.2% to 26.7%.
However, the unemployment forecast for next year remains unchanged, at 27%, as the agency assumes that the unemployment rate will rise again in 2014, before starting to decline in 2015.
The agency also includes for the first time in its quarterly report, their forecasts for 2015, the year in which they predict the Spanish economy will grow by 1.1% and the unemployment rate will drop to 26%.
In the agency’s worst case scenario, with a longer recession than previously predicted, Spain’s GDP could fall by 1.9% this year and continue to decline in 2014 and 2015, with a decline in activity of 1% and 0.3%, respectively.
In the report, the agency notes that the Spanish GDP performed better in the second quarter than in the first, and highlighted the “notable exception” in the good performance of Spain’s exports compared to its European partners.
On the other hand, they stressed that unemployment has fallen for four consecutive months since March, suggesting that there has been something more than a temporary increase in tourism. In addition they noted that the August PMI had also been “good news”.
Regarding the eurozone, the agency said that although the data indicated a general improvement in economic conditions, which points to stabilisation in the second half of 2013 and modest growth in 2014, a “robust” recovery is not yet expected.
According to El Economista, S & P forecasts a GDP contraction of seven tenths for the eurozone, thus improving the previous estimate of a decline of 0.8%, while for 2014 they predict growth of 0.8%, one tenth more than the previous forecast, and 1.5% in 2015
Article source: Kyero.com