Spain to lift its economic growth target for 2015

MADRID—Spain’s economy is expected to grow 2.9% this year, Prime Minister Mariano Rajoy said Monday, touting the improved forecast as a result of his government’s spending curbs and warning against populist alternatives in this year’s elections.

Rajoy, who took office during a recession and faces re-election this year, said his cabinet plans to approve Thursday a revised set of forecasts for 2015, including one predicting the creation of more than half a million jobs. The previous forecast for growth of the gross domestic product was 2.4%, up from 1.4% in 2014.

Alluding to policies of Greece’s leftist government and proposals by a Spanish leftist party, Podemos, for a bigger state role in the economy, Rajoy said Spain could create more than two million jobs in the second half of this decade—unless a swing toward populism derails the recovery.

Spain has been adding jobs faster than most other European countries hit by recession in recent years. Last week the national statistics bureau said the number of Spanish households with all active adults unemployed had fallen by 9.4% over the past 12 months. That was the steepest annual reduction since 2006, two years before the collapse of a real estate boom sent the economy into a prolonged slump.

“Spain’s society has shown that, with good policies in place, it’s capable of meeting goals that appeared unreachable and fix problems that appeared to be beyond solution,” Rajoy told a group of business and political leaders. “Probably, each one of you here could cite the specific sacrifices you had to make all these years.”

The country holds regional elections next month. Rajoy, whose conservative Popular Party won an absolute majority in parliament in late 2011, is required to call a general election before the end of the year.

Source:Market Watch