Analysts predict that Spain's tax rebate on basic foodstuffs and subsidies on public transport will be extended until end of 2024
The Organisation for Economic Co-operation and Development has also improved its growth forecast for the Spanish economy to 2.1% this year, with inflation "controlled" at 3.9%
Friday, 9 June 2023, 12:55
The Organisation for Economic Co-operation and Development (OECD) said that the current rebate of IVA, the Spanish sales tax, on certain basic foodstuffs will probably be extended "until the end of 2024", as well as the subsidies on public transport fares. Energy taxes that are currently reduced will also be extended beyond 30 June and phased out over the coming year, the OECD predicts in its analysis of the Spanish economy.
The OECD has also given its backing to the economic forecasts that Pedro Sánchez's government sent to the European Commission a few weeks ago. Its latest updates is for a GDP growth of 2.1% this year, 0.4% more than forecast just three months ago.
However, according to the organisation, growth will be just 1.9% in 2024 – a long way from the 2.4% forecast by the government. In the world economic outlook report published on Wednesday 7 June, the OECD reviews the growth that member countries will experience, with Spain at the forefront of growth.
According to the OECD forecasts, the global economy will grow by 2.7% this year and 2.9% next year, mainly due to the pull of emerging countries. In the case of the eurozone, its GDP will grow by 0.9% this year and by 1.5% in 2024, while the United States will grow by 1.6% this year and by 1% next year.
These growth rates are a far cry from those of Spain, which will be sustained by public investment thanks to European funds and exports, set to increase by 5.8% this year. Household consumption will only rise by 0.5% but will remain positive thanks to "controlled" and "falling" inflation and a "resilient" labour market, the report states.
The OECD also anticipates that inflation will fall from 8.5% in 2022 to 3.9% this year and in 2024 due to falling energy prices and the tightening of monetary policy by the European Central Bank (ECB). Underlying inflation – which does not measure energy products or fresh food – will remain high at 4.8% this year and 3.7% next year, although the forecast is up from three months ago.