“The political and media noise is getting louder, but GDP and employment are also growing while inflation is falling.”.
In a remote corner of the media and judicial noise that captures the attention of millions of Spanish citizens, a little light shines: the OECD Report, December 2024. The OECD is not a tool of political propaganda but a sound laboratory that scrutinises the economic health of the countries in the organisation and prescribes the appropriate diagnosis. The report highlights the growth of the Spanish economy; the estimated GDP for 2024 will grow by 3%, a figure higher than the 2.8% for the USA and well above the forecasts for France, 1.1%, Italy, 0.5%, and Germany, 0.4%. The advance of Spanish GDP is supported by a resilient labour market, increased savings among families, and the surpluses of real income for consumers. Investment is recovering thanks to the fall in financing costs and the implementation of the Recovery, Transformation and Resilience Plan. The risks of economic slowdown are none other than the intense geopolitical signals with their effects on energy prices, the fall in demand from European clients, and to some extent the slow implementation of the Recovery Plan.
The report emphasises the growth of GDP while inflation is falling, and fiscal consolidation continues to be reflected in a contraction of the budget deficit to 3% of GDP in 2024. It forecasts a slow decline in the deficit to 2.5% in 2025 and 2.1% in 2026. Projections - the OECD report emphasises - that respond to the Government's commitment to reduce current spending and capital transfers, including the aid package to mitigate the effects of the Valencia floods, which will not exceed 1.1% of GDP. The report calls for improving the efficiency of public spending while echoing the observations of Spanish entrepreneurs regarding the difficulty of finding candidates with the necessary training for available jobs, which contributes to unemployment and underemployment. Consequently, the Report demands adjusting education and vocational training systems to the demands of the labour market, connecting them with the requirements of new technologies and the greater level of cosmopolitanism that Spanish companies face.
However, beyond these observations, the Report highlights the solid growth of the Spanish economy after the pandemic, an advance in the demand and supply of goods and services, and the particularity that for the first time the Spanish economy is recording a surplus in international trade. In short, the media and political noise is getting louder, but GDP, employment is also growing and inflation is falling. The OECD Report confirms it.♦
