World Economy

Spain Boosts Growth Outlook to 2.9%

Spain Boosts Growth Outlook to 2.9%Spain Boosts Growth Outlook to 2.9%

Spain’s economy may grow around 2.9% in 2016, up from the current official target of 2.7%, although 2017 could come under pressure due to lower global growth, acting Economy Minister Luis de Guindos said on Sunday.

“New macroeconomic projections, which would be a first step prior to the elaboration of a future budget by the (next) government, point to a stronger growth rate of 2.9% in 2016,” de Guindos told reporters on the sidelines of the G20 summit in the Chinese city of Chengdu, Reuters reported.

The economy expanded 3.2% in 2015, the fastest pace in eight years, as it benefited from monetary stimulus and rising household demand as well as faster job creation and falling oil prices.

Though de Guindos did not provide any figure for economic growth in 2017 he recognized that a slowdown in the eurozone could have an impact. The country is forecasting growth of 2.4% next year.

The revision comes as 61-year-old caretaker Prime Minister Mariano Rajoy, who extended his victory in a repeat vote on June 26, struggles to form a government because he lacks the necessary support in parliament to become prime minister. King Felipe VI is due to begin talks with political leaders this week to identify a candidate who can put together a majority.

Meanwhile, Spain is waiting to find out whether it will become the first EU member state to be fined for violating spending limits. Officials in Brussels concluded the nation did not take sufficient steps to narrow its budget deficit, which came in at 5.1% of gross domestic product last year, compared to a target of 4.2%.

On Sunday, de Guindos reiterated Spain’s opposition to the fine.

The nation’s statistics office is due to present a preliminary estimate for second-quarter GDP on June 29 and job figures on June 28.

Spain’s national pension system which is running the biggest deficit in its history, paid out $330 million in pensions to 29,321 deceased Spaniards in one year, says a report issued by country’s audit office.

Spain’s Audit Office conducted the study by cross-checking pension payments on the social security system with deaths registered at the National Institute of Statistics dating way back to 1989.

The report reveals that these pensions to the dead people add up to more than $27 million every month. Although, the original study was done in December 2014, as many as 95% of these people continued to receive pension October 2015 when a followup study was conducted.

The report suggested a number of recommendations for the improvement in the system.