OECD lowers 2024 growth forecast for Spain to 1.4% and calls for greater fiscal adjustment | The Corner

The OECD’s Revised Economic Growth Forecast for Spain in 2024

The Organisation for Economic Co-operation and Development (OECD) has revised down its economic growth forecast for Spain in 2024 to 1.4%, which is significantly lower than the government’s expectation of 2%. This information is highlighted in the OECD’s half-yearly Outlook report published on Wednesday. The report emphasizes the need for further budgetary adjustment to effectively manage public debt.

Sustainable Development Goals (SDGs)

The report emphasizes the importance of aligning economic policies with the Sustainable Development Goals (SDGs). It states that stronger and sustained fiscal consolidation is necessary to reduce debt and create opportunities for growth-friendly spending, which is in line with SDG 8: Decent Work and Economic Growth.

Population Ageing and Public Spending

The OECD warns that population ageing will lead to increased public spending, estimating a rise of approximately 2.7 GDP points between 2024 and 2040. This issue is relevant to SDG 3: Good Health and Well-being, as it highlights the need for sustainable healthcare systems to support an ageing population.

Government’s Planned Deficit Reduction

The OECD expresses doubt regarding the government’s planned cut in the public deficit. While the government aims to reduce the deficit from 3.9% of GDP in 2021 to 3% in 2024 and 2.7% in 2025, the OECD estimates a different trajectory. It predicts a deficit of 3.6% in 2023, followed by 3.2% in 2024 and 3.1% in 2025. This issue relates to SDG 16: Peace, Justice, and Strong Institutions, as it emphasizes the importance of transparent and accountable fiscal policies.

Recommendations for Spain

1. Stimulating Research and Development (R&D) Projects: The OECD suggests promoting partnerships between companies and research centers to enhance innovation and productivity. This recommendation aligns with SDG 9: Industry, Innovation, and Infrastructure.
2. Reducing Regulatory Differences: The OECD advises reducing regulatory disparities among autonomous communities to improve productivity and competitiveness. This recommendation supports SDG 8: Decent Work and Economic Growth.

Improving Qualifications and Educational Results

The report emphasizes the importance of improving qualifications and educational outcomes, particularly for young people, to enhance their employment prospects. This recommendation is relevant to SDG 4: Quality Education, as it highlights the need for inclusive and equitable education systems.

Implementing Efficient Labour Market Policies

The OECD suggests implementing more efficient active labour market policies to facilitate employment opportunities. This recommendation aligns with SDG 8: Decent Work and Economic Growth, as it emphasizes the importance of promoting inclusive and sustainable economic growth.

Environmentally-Friendly Tax System

The report calls for a tax system that is more oriented towards environmental objectives, with taxes that are environmentally friendly. This recommendation supports SDG 13: Climate Action, as it emphasizes the need for sustainable environmental practices.

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