Spain's economic growth set to race on, OECD reports
The OECD is predicting Spain's economic bonanza will continue for some time to come, with economic activity expanding at close to full steam over the next two years. In its half-yearly Economic Outlook report released yesterday, the Paris-based Organization for Economic Cooperation and Development forecast that Spain's gross domestic product would grow 3.2 percent this year and 3.3 percent the following after a rise of 3.4 percent this year. That compares with growth in the 30-member OECD of 2.9 percent in 2006 and 2007 after an increase of 2.7 percent this year.
"Growth (in Spain) should remain strong in 2006 and 2007, close to potential rates (slightly above 3 percent), driven by buoyant domestic demand and some-pick-up in exports following recovery in Europe," according to the report. Economic activity in the euro area, which is the main destination of Spanish exports, is set to accelerate to 2.1 percent next year and 2.2 percent the following, after posting growth of 1.4 percent this year. Commenting on the report, Spanish Economy Minister Pedro Solbes said the OECD's evaluation of the Spanish economy was in line with the government's. The next two years would continue to be "good," but he warned that reforms to boost productivity and further modernize the country were needed to ensure growth was sustainable in the long term.
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