The relaxation of the public deficit objective for this year and next will have positive effects for the Spanish economy according to Funcas and Bloomberg, who improved their forecasts for 2013 by two tenths of a point to match predictions from the IMF and EC.
Funcas estimates that GDP will increase 0.7% in 2014 while experts that the agency consulted believe that it will grow by just 0.5%. The changes are small and good, but they won't help to reduce the unemployment rate or galvanize consumer spending, which is expected to contract by 0.3%.
The new view is better but still shaky, and it reaffirms that Spain needs to lower taxes to compensate for decreased spending power and help families reduce their debt load.
