Spain sees growth slowing to 2.2% this year, sets deficit target of 2%

April 30, 2019

MADRID (Reuters) – Spain’s acting Socialist government on Tuesday forecast weaker economic growth this year, of 2.2%, as the eurozone faces a slowdown, and said it expected the budget deficit to fall to 2% of Gross Domestic Product.

The Socialists, who won the national elections on Sunday, made the forecast in their four-year stability program submitted to the European Commission.

Last year, Europe’s fifth-largest economy grew by 2.6% and the public deficit closed at 2.48%.

The Socialist government had previously estimated 2019 growth at 2.2%, while targeting a deficit of 2%.

The previous stability program from the Socialist administration had higher growth estimates of 2.4% for this year and 2.3% in 2020 and 2021.

It projected next year’s deficit to narrow to 1.1%, and in 2021 to 0.4%, and in 2022 the budget should be balanced at zero percent of GDP.

Spain’s budget has been subject to strict targets set by Brussels after tipping into deficit during the 2008 economic crisis.

Spain’s unemployment, one of the highest in the European Union, will drop to 9.9% by 2022, according to the program. Last year it was of 15.3%, according to preliminary government data. For 2019 the forecast is 13.8%.

(Reporting By Joan Faus, writing by Andrei Khalip and Joan Faus; Editing by Marguerita Choy and Richard Chang)

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