The Spanish economy will continue to grow through 2021 but any government elected on 28 April should prepare for a severe downturn, warned the Bank of Spain on 21 March.
From being part of the problem during the sovereign debt crisis, Spain is now proving a stronghold of economic recovery in the Eurozone. While Italy is in recession, Germany expects growth of just under 1%, and the French economy is decelerating, Spain is a source of good news.
Spanish GDP is projected to grow at 2.2% in 2019, 1.9% in 2020, and 1.7% in 2021. In 2018 the economy surged by 2.5%.
Although exports are slowing down, domestic demand is compensating for the lass thanks to job creation, low inflation, and higher pensions.
The Bank of Spain believes that the policy of hiking the minimum wage could slow down job creation, but unemployment is still expected to decrease from 14% today to 12% by the end of 2021.
There are still 3.3 million unemployed Spaniards. From 2007 to 2014 Spain lost 3.8 million jobs and saw wages drop by 10%. Since 2014, however, the Spanish labour market has halved with consumer demand rising by 2.2% a year, compared with a Eurozone average of merely 1%.