OECD Forecasts Positive Growth for Spanish Economy in 2024, but Encourages Long-Term Measures for Sustainability
The Organization for Economic Cooperation and Development (OECD) has forecasted that the Spanish economy will show positive growth this year. They predict an increase in the Gross Domestic Product (GDP) by 1.8% in 2024, along with lower inflation rates and a decrease in unemployment. Despite these positive outlooks, the OECD also provided a list of recommendations to ensure sustained growth and compliance with new European fiscal rules.
The organization applauds Spain for efforts to control the deficit but expresses concern about the high public debt in the country. To address these challenges, the OECD recommends measures such as increasing the Value Added Tax (VAT) and environmental taxes, improving productivity through educational enhancements and technology promotion, and revitalizing labor market policies to enhance job efficiency.
Although the Spanish economy is expected to show strong growth in 2024, with private consumption as a driving force, there are concerns about productivity, low investment, and demographic challenges affecting GDP growth in the long term. The OECD suggests promoting innovation, improving education levels, and reforming the labor market to support sustainable growth.
On a global scale, the OECD predicts global GDP growth of 3.1% in 2024 and 3.2% in 2025, with declining inflation rates. While there are varying growth rates across regions, the overall economic outlook is positive, with risks becoming more balanced. The organization emphasizes the need for prudent monetary policy and fiscal measures to address debt sustainability and regional disparities in growth rates.
In summary, while Spain’s economy is expected to show strong growth this year due to private consumption driving forces, there are still challenges that need to be addressed such as high public debt levels. The OECD recommends measures such as VAT increases and labor market reforms to support sustained growth while also suggesting global economic predictions of continued positive outlook but with risks becoming more balanced.
