Spain: Residential construction falls

Economic growth is likely to slow in 2008 and 2009, as residential construction falls. Private consumption may decelerate, reflecting lower employment gains and tighter credit conditions. From a peak in late 2007, inflation should decline as demand pressures moderate.
In order to minimise output losses resulting from the slowdown in domestic demand, the indexation of wages to past inflation should be eliminated. Competition in product markets, in particular in retail distribution, needs to be nurtured to raise medium-term growth prospects. Calls for further relaxation of fiscal policy should be resisted in order to tackle the future fiscal consequences of population ageing.



©OECD Observer No. 264/265, December 2007-January 2008

OECD Economic Outlook No. 82, December 2007
Visit www.oecd.org/spain
All OECD Observer articles on Spain




Economic data

GDP growth: -1.8% Q1 2020/Q4 2019
Consumer price inflation: 0.9% Apr 2020 annual
Trade (G20): -4.3% exp, -3.9% imp, Q1 2020/Q4 2019
Unemployment: 8.4% Apr 2020
Last update: 9 July 2020

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