Spanish premier trumpets economy, upgrades growth forecast

AP News
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Posted: Feb 24, 2015 11:51 AM
Spanish premier trumpets economy, upgrades growth forecast

MADRID (AP) — Spain's economy will grow by more than previously thought this year, the prime minister said Tuesday, as he laid out the credentials of his conservative government prior to elections later this year.

Mariano Rajoy said Spain had moved from the edge of the abyss to being the eurozone country with the highest growth and job creation. He is predicting growth of 2.4 percent, up from the 2 percent prediction.

"Nobody expected that three years ago," said Rajoy.

"It's a nation that has come out of a nightmare. It has saved itself, recovered economic confidence, enjoys prestige and is once again attractive for investors," Rajoy said at the opening of the annual two-day state-of-the-nation parliamentary debate.

But opposition parties accused the prime minister of being triumphalist and out of touch with reality.

Socialist party leader Pedro Sanchez said Rajoy had promised 3 million new jobs prior to his election in 2011, but there were fewer people with jobs now. He said that Rajoy's government was one of cutbacks and that more people were now threatened with poverty.

"What do you know about Spaniards? "Sanchez asked rhetorically. He called on Rajoy to "go out onto the street" and see the real Spain.

Despite the growth — Spain also grew 1.4 percent in 2014 — unemployment is still at 23.7 percent. Rajoy on Tuesday promised to create around 500,000 jobs this year, raising to 1 million the number created since taking office in 2011.

Spain's economy began to fall apart in 2008 with the collapse of its bloated real-estate sector. Government spending cuts and tax increases, along with wide-ranging economic reforms, have helped restore investor confidence and slash the country's borrowing costs.

Rajoy has to call elections by the end of the year. Opinions polls predict his Popular Party will come first, but it won't win enough to ensure the absolute majority it now has in parliament.

The prime minister said one of his administration's biggest achievements was avoiding a public finances bailout like those for Portugal and Greece. But Spain, with Rajoy in charge, did take a bailout in 2012 to prop up ailing Spanish banks.

Rajoy said it was time to compensate Spaniards for their sacrifices, but made no major announcements beyond promises of minor adjustments in social welfare payment discounts for hiring permanent workers, facilities for families to pay debts and a widening of subsidies for single parents.