MADRID: A fast-growing Spanish economy should create at least 2 million jobs by 2018 to cut the unemployment rate to about 15 percent, the government said, although fresh data also showed underlying imbalances persist.
The improving economy is key to Prime Minister Mariano Rajoy’s bid to win a second term as he fends off new political forces gaining traction ahead of a parliamentary election at the end of the year.
His government on Thursday raised 2015 growth targets to 2.9 percent and said the jobless rate, one of the biggest blots on the turnaround and still higher than when Rajoy took office in 2011, would fall more steeply than earlier forecast.
More than five million people are out of work in Spain, nearly two thirds of them for more than a year, mainly as a result of the loss of 1.7 million jobs in the construction sector when a decade-long economic boom ended abruptly in 2008.
“Spain left behind the recession two years ago but I had always said we had not yet left the crisis,” Economy Minister Luis de Guindos told journalists.
“But what these numbers show is that if this forecast materialises, then we can leave behind the longest, deepest and most intense crisis of modern economic history in our country,” he said, adding that the new predictions were conservative.
While ambitious, the new targets look achievable, at least for this year and next.
Spurred on by rising household spending, output grew by a higher-than-expected 0.9 percent in the first three months of the year, the National Statistics Institute said on Thursday.
The new 2015 target is a big jump from a previous 2 percent forecast and compared to 1.4 percent growth in 2014. Rajoy’s centre-right government projected this faster pace would continue in the next three years.
Spain has emerged from two recessions and a banking crisis as one of the better-performing European economies, with low oil prices and a weaker euro providing an additional fillip.
But large economic imbalances have yet to be corrected, storing up potential problems further down the line, while even now many Spaniards say they have yet to experience any recovery.
A large public deficit, seen at 4.2 percent of economic output this year, and an external debt worth around 170 percent of GDP — one of the highest in the world — are other potential threats to the turnaround.
The external debt of a country measures what the government, banks, companies and families owe to the rest of the world and is a good measure of whether it lives beyond its means.
Spain’s current account was in deficit to the tune of 2.03 billion euros in February, the Bank of Spain said.
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