The Spanish economy is predicted to experience positive growth in 2024, according to the Organization for Economic Cooperation and Development (OECD). The forecast predicts an increase in Gross Domestic Product (GDP) by 1.8%, along with lower inflation rates and a decrease in unemployment. However, despite these positive outlooks, the OECD has issued recommendations to ensure sustained growth and compliance with new European fiscal rules.
The OECD applauds Spain’s efforts to control the deficit but expresses concern about the country’s high public debt. To address these challenges, the organization recommends measures such as increasing Value Added Tax (VAT) and environmental taxes, improving productivity through education enhancements and technology promotion, and revitalizing labor market policies to enhance job efficiency.
Additionally, the OECD stresses the importance of ensuring additional revenues for public coffers through expanding the VAT base and improving spending efficiency. Despite strong growth expected 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.
To promote sustainable growth, the OECD suggests promoting innovation, improving education levels, and reforming the labor market. 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.
In summary, while Spain’s economy is expected to show positive growth in 2024 thanks to private consumption as a driving force, there are concerns about productivity issues that need to be addressed through innovation promotion and education improvement. Additionally, restructuring labor market policies can help support sustainable growth over time. The OECD also highlights global economic trends where prudent monetary policy and fiscal measures are crucial for debt sustainability management and addressing regional disparities in growth rates.
