Spain's Rajoy raises 2015 growth forecast to 2.4 percent

Staff Writer
Columbus CEO

MADRID (AP) — Spain's economy will grow by more than previously thought this year, Prime Minister Mariano Rajoy said Tuesday as he lay out the credentials of his conservative government in what is an election year.

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 2.0 percent prediction.

"Nobody expected that three years ago," said Rajoy, who has to call elections by the end of the year.

"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 the annual two-day state-of-the-nation parliamentary debate.

Opinions polls predict Rajoy's Popular Party will come first in the upcoming election but won't win be enough to ensure an absolute majority in either chamber of Spain's Parliament.

Despite the growth — Spain also grew 1.4 percent in 2014 — unemployment remains high at 23.7 percent. Rajoy promised to create some 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 as well as wide-ranging economic reforms have helped restore investor confidence and the slashed the country's borrowing costs.

The prime minister said one of his government's biggest social achievements was to have avoided asking for an economic bailout, unlike several other eurozone countries.

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.