President of the Central Bank of Spain Luis Maria Linde believes that the Spanish economy will grow by 2% in the last quarter of 2014, but at the same time, he warns that Spain should continue withthe adjustment ofeconomic system in order to achieve the level of the deficit, which is requiredby the European standards.
Luis Maria Linde said that the Spanish economy will grow this year by 2%, instead of 1.3% expected by the government ofSpain on the basis of macroeconomic forecasts of the state budget. This improvement is the result of significant growth of national demand, which plays a key role in this recovery phase of Spanish economy, mainly due to the normalization of financial conditions in the country.
In addition, Linde joined the alarming point of view that the recovery of the Spanish economy depends now more than ever on the evolution of the economy of the euro area, which is experiencing stagnation since the beginning of this year. The warning was the addition to the alerts, made in the recent weeks by the European Central Bank (ECB) and Minister of Economy of Spain, Luis de Guindos.
In terms of fiscal consolidation, the president of the Central Bank of Spain admitted that “the Spanish economy is nowadays in a recovery phase, which means not only more activity, but also more progress in correcting large imbalances accumulated during the early stages of growth, such as the budget deficit, unemployment, growth indebtedness of the private sector.” In this regard, Linde added that he believes that Spain will have to continue to work and carry out the necessary structural and tax adjustments from now until the end of the year to achieve the goal of the government deficit, set for this year at 5.5% of GDP (gross domestic product). President of the Bank of Spain has also called for a “continuous” control of tax revenues in 2015, so that there were no deviations in the objectives of the state budget deficit.