“We export one third of our GDP”, says Mariano Rajoy
At the inauguration in Madrid of the 8th Spain Investors Day Forum, Mariano Rajoy, explained that “the leading role of our foreign trade sector” not only “provides guarantees of the sustainability” of our economic growth, but will also allow “further progress to be made in raising our levels of revenue, productivity, salaries and, in short, in improving our well-being”.
During his speech, Prime Minister Rajoy recalled that the Spanish Constitution will celebrate its 40th year in 2018. He remarked that what has happened in Spain since it was approved, both at a political and an economic level, “can only be described as a resounding success”.
Thanks to this far-reaching transformation, Spain is now the 14th largest global economy and the fourth largest in the Eurozone, the 16th largest exporter of goods in the world, the third leading tourist destination and one of the “most attractive destinations for investment”. Mariano Rajoy also added that “Spain is one of the countries with the best infrastructure”, both traditional (high-speed rail travel, highways, ports and airports) and digital (25.7 million users have fibre optic).
The Prime Minister also spoke about the “unprecedented economic crisis”, that Spain through between 2009 and 2013. He stressed that over these four years, it lost 10% of its GDP, unemployment rose by over 26% and 3.8 million jobs were lost.
After explaining that “this was due to an unsustainable build-up of imbalances” (public deficit, foreign trade deficit, inflation and loss of competitiveness), Mariano Rajoy highlighted that the situation was turned around thanks to the reforms undertaken by the government and the “efforts made by the whole of Spanish society”.
“Spain is now growing in a strong, balanced and sustainable fashion, on solid foundations; there is strong job creation, it has recovered its competitiveness and the outlook for the future is very promising”, stressed the Prime Minister.
Greater weighting of foreign trade sector
Rajoy underlined that 2017 was “the fourth straight year of growth, job creation and foreign trade surplus”, a combination never before produced by the growth model in Spain. He then added that the recovery of competitiveness has led to 2017 closing “with four straight years of a surplus in the current account”.
In this regard, he added that “Spain closed 2017 with estimated growth of 3.1%, practically double the Eurozone average, and 611,000 new jobs were created. These figures have allowed us to recover “revenue levels enjoyed before the crisis” and “two thirds of all the jobs lost”.
According to the Prime Minister, “growth and job creation go hand-in-hand with the recovery of competitiveness”. He also added that “Spain is now growing because it is able to sell its products to the rest of the world and no longer depends on external borrowing”.
In this regard, Rajoy highlighted that “we export one third of our GDP, a figure only Germany can match in Europe”.
The Prime Minister explained that “the recovery of competitiveness and the leading role of our foreign trade sector” is that which “provides guarantees of the sustainability of our economic growth and that which will also allow further progress to be made in raising our levels of revenue, productivity, salaries and, in short, in improving our well-being”.
Good economic outlook
For all these reasons, Mr Rajoy stated that there are now many indicators that “point to the good state of health of the Spanish economy”. For example, economic agents retain their confidence in the Spanish economy, investment in capital goods is performing in a highly dynamic fashion, and the recovery has even filtered down to the construction sector, which is helping the property market to return to normal.
In short, “the recovery of the Spanish economy is now more consolidated, and the outlook for growth is good in the medium term” added Mariano Rajoy. This has also been ratified by the International Monetary Fund in its estimation that “Spain will be among the most developed countries in the world to grow the fastest in 2017 and 2018”.
Prime Minister Rajoy explained that, in the medium term, the government’s forecasts point to average growth of 2.5% until 2020, a reduction in the unemployment rate to 11% and attaining budgetary balance within two years, “with public debt standing at around 91% of GDP and the surplus in the current account remaining at around 2% of GDP”.
General State Budget 2018
After explaining that the keys to this change have been budget stability and reforms, Mariano Rajoy asserted that the government “is working to approve the General State Budget for 2018”, to which end it is necessary “to forge agreements with other political forces in an exercise of democratic responsibility”.
In terms of the reforms undertaken, the PM pointed out that it is necessary “to continue adopting measures” to guarantee that Spain “continues to be an economy open to foreign trade, competitive, productive and with an ability to adapt to a changing environment”. To that end, the government will step up its efforts in 2018 in such areas as worker training, active employment policies, R&D+i, digitalisation and the elimination of administrative burdens
According to the President of the Government, “the political uncertainty in Catalonia” represents a challenge to Spain and to its institutions”, since “political instability in that autonomous region is the greatest, or rather the only, shadow hanging” over the Spanish economy. In fact, the government has been forced to revise the growth forecast for 2018 downwards “to 2.3% of GDP”.
Mariano Rajoy underlined that “a legal, democratic and politically unimpeachable response has been given “to the sovereign challenge in Catalonia, “an unprecedented attack on our constitutional order”.
For all these reasons, following the elections held on 21 December, “we hope that a regional government can soon be formed that upholds the constitutional order and the rule of law, and that the situation returns to normality”, he added. Should that happen, continued the President of the Government, “growth may be much higher than the current forecasts and probably similar to the figures for the last few years”.