Guindos Sees `Positive Surprise' for Spanish Economy in 2016

  • Guindos sees better growth if political stability safeguarded
  • Prime Minister Rajoy claims he's best-placed to nurture growth

The Spanish economy could provide a “very positive surprise” next year if political stability and reforms stay in place, Economy Minister Luis de Guindos said.

Early indicators point to a good fourth quarter for the Spanish economy which could grow more than 3 percent in 2016 in a stable political context, de Guindos told Madrid-based RNE radio in an interview. The government’s official estimate is for 3.3 percent growth this year and 3 percent in 2016.

Prime Minister Mariano Rajoy is trying to convince voters that his party is the best-qualified to nurture Spain’s economic recovery as the country braces for general elections on Dec. 20. Even so, opinion polls predict that Rajoy’s People’s Party won’t have enough support to win the elections outright as voters punish it over the legacy of austerity and corruption scandals.

“The Spanish economy, if we remove the uncertainty component, could give a very positive surprise, very positive.” said de Guindos. “And we could perfectly grow above 3 percent if there is economic stability.”

Data released Friday showed industrial production expanded 3.8 percent in September on an annual basis, compared to a Bloomberg News survey predicting a 2.8 percent increase. Economic growth slowed to 0.8 percent in the third quarter from 1 percent in the previous three months, the National Statistics Institute said Oct. 30, citing preliminary estimates.

The government’s economic credentials took a knock Thursday when the European Commission said Spain would miss its budget reduction goals this year and in 2016.

The European Commission said it predicts Spain’s budget deficit will be 4.7 percent of output this year and 3.6 percent next year. That’s higher than the government’s own expectations of 4.2 percent and 2.8 percent.

Guindos told RNE that Spain has been prudent with its projections, arguing that the commission has been wrong in the past about the progress of Spain’s finances and that the government’s targets are feasible.

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