Wed. Apr 24th, 2019

Goldman Sachs maintains that Spain will grow 2.3% this year but warns against excessive public debt

Goldman Sachs maintains that Spain will grow 2.3% this year but warns against excessive public debt


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MadridUpdated:

The uncertainty linked to the result of the next general elections in Spain it is not a "significant" risk to the prospects of the economy, according to the American bank Goldman Sachs. This entity in a report on the economies of Spain and Portugal, has taken the decision to maintain its growth forecast for Spain for 2019 at 2.3% and to assume the forecasts of the European Commission for Portugal (1.8% for this year).

However, the entity has warned against the fact that if the global economic slowdown worsens and a persistent 'shock' occurs, domestic demand will not serve as a compensation factor. In addition, he has alerted «Limited fiscal space» with which Spain has because of the high public debt and the percentage of doubtful loans held by financial institutions, which would hinder their "ability" to lend money in an "adverse economic environment".

The entity has stated in a report that "growth in Spain continues to surprise on the rise and it remains more solid than in most countries of the euro zone ».

In this way, Goldman Sachs has decided maintain the forecast that was updated last November, when it decided to revise the forecast of GDP growth one tenth up to 2.3% for the competitiveness of the Spanish economy.

Politics, "source of uncertainty"

Although he has recognized that Politics is a "source of uncertainty" in Spain and that there will be no "clear majority" after the next elections. Along these lines, the bank has ensured that all possible coalitions will be "committed" to the European project, with "healthy" public accounts and a "competitive" market economy.

For this reason, it is "unlikely" that any government that emerged from the April 28 elections represents a "greater impact" for short-term growth.

Goldman & Sachs has once again stressed that Domestic demand was the main reason for the growth recorded in 2018. "Private consumption continued to grow thanks to high consumer confidence, the strong employment situation and wage increases," Goldman Sachs analyst Sven Jari said.

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