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ECONOMY

Spain will top economic growth and job creation this year, say world bodies

IMF and OECD are forecasting a rise of 3.1% in economic output and a 2.9% surge in jobs

People standing in line outside an unemployment office in Alcalá de Henares (Madrid).
People standing in line outside an unemployment office in Alcalá de Henares (Madrid). EFE

There was good news for Spain on Thursday from the world’s major think tanks.

After years of dire predictions, Spain is now expected to be the developed world’s biggest job creator this year and the next, while its economy will grow faster than most in 2015.

The Organization for Economic Cooperation and Development (OECD) says that Spain will see a 2.9% rise in the number of available jobs this year, and 2.8% the next. Only Iceland, with an expected job growth rate of 4.1% this year, will beat Spain in aggregate terms.

The OECD has underscored that Spain’s unemployment figure is still one of the highest among member states

After years of job destruction due to the protracted economic crisis that began in 2008, Spain now seems set to bring its soaring unemployment below the 20% mark by the end of next year. The OECD's Employment Outlook 2015 report is positing a figure of 19.7% in the fourth quarter of 2016, although the average annual rate for next year will still be above 20%, a threshold that was reached in 2010, then amply surpassed.

Other world bodies are not as optimistic, however. The International Labor Organization (ILO) feels that Spain’s jobless rate will remain at 21.5% as late as 2019, while the International Monetary Fund (IMF) talks about 2017 as the year that Spain will fall below the 20% rate.

In any case, the OECD underscores that Spain’s unemployment figure is still “one of the highest” among member states. By comparison, the average rate for OECD countries is under 7%.

This body also criticizes the high number of temporary jobs in Spain, where 24% of workers are on this type of contract, a figure only exceeded by Poland in the OECD community.

Accelerating growth

The IMF, however, is showing Spain off as the biggest-growing economy in 2015 out of a group of eight developed countries, including the United States.

In its World Economic Outlook update released on Thursday, the Washington-based organization is forecasting 2015 growth of 3.1%, 0.6 points more than in its last report dated April. Spanish GDP is also expected to grow 2.5% in 2016.

This is in sharp contrast with the IMF’s own prediction for Spain just a little over a year ago, when it said that the Spanish economy would inch forward a mere 0.8%. By raising its own forecast, the IMF brings itself more in line with the Bank of Spain and private analysts. Only the Spanish government itself is even more optimistic, talking about output growth of 3.3% this year.

English version by Susana Urra.