The Spanish economy strengthens according to the European Commission

The Spanish economy is experiencing a moment of surprising strength, according to the recent growth forecasts presented by the European Commission. Brussels has raised Spain's growth forecast by four tenths, placing it at a solid 2.1%, in contrast to the anemic performance of the rest of the Old Continent. This increase in economic prospects for Spain is largely due to the unexpected boost in the Spanish labor market, which is serving as fuel for the country's economy, positioning it prominently in the European Union. Although the forecasts for Spain have significantly improved for this year, the European Commission has slightly lowered expectations for the following year, setting activity at 1.9%. However, these figures remain optimistic compared to expectations for the eurozone as a whole, where GDP growth of 0.8% is expected, double that of the previous year, with a more encouraging forecast of 1.4% for 2025. Spanish economic growth, driven by domestic demand and the strength of the labor market, has led to an upward revision of economic projections by institutions such as the International Monetary Fund and the Bank of Spain. The high growth rates recorded in recent quarters have had a positive effect on the economy, improving expectations for the country. The Spanish government has seized on this data to highlight the effectiveness of its economic policy, emphasizing that Spanish economic growth will be almost three times higher than the eurozone average. This economic strength is also seen in other countries such as Greece, Portugal, Cyprus, and Italy, which have managed to recover after the financial crisis of the past decade. In contrast, the German economy, considered the European locomotive, will barely see its activity grow this year, with a forecast of 0.1%. The economic stagnation of the country has helped moderate inflation in the eurozone, which is expected to be at 2.5% in 2024, compared to 5.4% the previous year. The restrictive monetary policy of the European Central Bank has been key in controlling prices, although it has had repercussions on economic growth. The ECB is expected to lower interest rates in June, which could help boost economic activity in the region. However, there are risks, especially related to the resurgence of inflation in the United States, which could affect the ECB's future decisions. Overall, it is expected that the relaxation of credit conditions and the development of the recovery fund will boost economic recovery, although at a slower pace than anticipated. The improvement in global trade is also seen as a positive factor for economic growth in the region.