The OECD has raised Spain’s economic growth forecast by one point, to 2.8% in 2024. With this upward revision, the international organization confirms that the advance of our country’s GDP will drive the main economies of the eurozone.
The improvement in the OECD’s projections is in line with those of the government this Tuesday and those of the Bank of Spain last week. The expected GDP growth is four times higher than that of the eurozone as a whole this year. This strength is supported by the recent corrections to the INE’s national accounts and by the better-than-expected performance of family consumption, business investment and, above all, the external sector, and specifically tourism, which has been expanding its “attraction” since the end of the pandemic began in 2021.
The transformation of the labor market and the historic creation of jobs are essential in this scenario. In fact, the OECD’s upward revision is the largest for any of the major developed economies made by this multilateral organization in 2024. By 2025, the updated projections reach 2.2% GDP growth in our country.
The OECD has also revised its inflation forecasts, estimating that in 2025 it will already be around 2%. This is an estimate similar to the one it is launching for the entire eurozone, and which will favour The European Central Bank (ECB) lowers its official interest rates and ease financing conditions and the cost of mortgages and loans in general.
It is precisely access to housing due to rising prices that constitutes the main problem for families, especially for the most vulnerable and in capitals and tourist areas, where work is concentrated.
“Spain is one of the countries where the rise in rates weighs most heavily. Households pay higher interest due to the prevalence of variable rate mortgages and have lower interest to pay. [de los depósitos]”In Germany and France, it is households that are actually benefiting from the increase,” explained Ángel Talavera, chief economist for Europe at Oxford Economics, on Tuesday.
Government optimism
The Government’s macroeconomic update on Tuesday indicates that private consumption will be one of the main drivers of growth, with growth rates of around 2% over the entire period. This positive development in private consumption is supported in particular by the good performance of the labour market.
“The dynamism of the labor market is maintained, which will allow the creation of around 500,000 jobs per year and will exceed 22 million people employed next year, while the unemployment rate continues to fall, which will be below 10% in 2026,” said this Tuesday the Minister of Economy, Carlos Body. A growth in employment that is accompanied each year by the improvement of hourly productivity and the increase in remuneration per employee, which will exceed inflation, which will allow the purchasing power of workers to continue to improve.
Investment is also revised upwards and constitutes one of the main elements of the upward update of economic forecasts, reflecting the dynamics and positive contribution of the Recovery Plan. “Likewise, the dynamism of the external sector will be maintained, thanks to the evolution of exports of goods and services, which will maintain their positive tone,” stressed the Minister of Economy.
Another threat is the risk that the Government will fail to approve the General State Budgets (PGE) for 2025. That same Tuesday, the Council of Ministers agreed to remove the budgetary stability objectives from the parliamentary process. According to the government, “the objective of this decision is to give more time to the negotiation by offering a new opportunity for dialogue” with its parliamentary partners, given the risk that the way will be reversed in Parliament during Thursday’s vote, due to lack of support.
Furthermore, the Bank of Spain considers that in order to comply with the budgetary rules of the European Union (EU), cuts and adjustments would have to be made that would affect all projections. However, before October, the multiannual plan that Spain will have to send to the European Commission will not be known.
