BARCELONA, Spain, Oct. 18 (Xinhua) -- Two of Spain's major banks this week joined international and national financial institutions in forecasting that the growth of the Spanish economy this year will surpass earlier expectations.
CaixaBank and BBVA have both raised their outlook for the country's economic growth in 2024 to 2.8 percent and 2.9 percent, respectively.
This follows the decision in September by the Organization for Economic Cooperation and Development (OECD) to raise its growth prediction for Spain by one percentage point to 2.8 percent.
Also last month, the Spanish government revised its forecast upwards to 2.7 percent, following the Bank of Spain's decision to increase its GDP growth prediction to 2.8 percent.
"The rise in the forecasts for economic growth has a lot to do with the labor market and in particular the evolution of the labor market related to services and foreign tourism, which in the past few months, over the summer, was much better than expected," Javier Vazquez, associate professor of economics at the University of Barcelona, told Xinhua on Friday.
Tourist overnight stays in Spain reached an all-time high this summer, beating the previous record set before the pandemic in 2019, according to the Spanish National Statistics Institute.
BBVA said the adjustment to its economic growth forecast is based on such elements as improved competitiveness in services, an increase in the workforce due to migrants, the reduction in interest rates, and drop in inflation.
Meanwhile, CaixaBank highlighted the role of strong exports, citing a 30 percent increase in the number of exporting companies compared to a decade ago, meaning that exports now account for 38 percent of GDP compared to 26 percent in 2013.
Vazquez believes a fall in energy prices, particularly fuel prices, has also contributed to the growth of the Spanish economy because Spain is a fuel importer, therefore lower energy costs make industry and production costs less expensive, and raise internal demand as people consume more.
However, the professor has warned that continued and sustained economic growth could not be taken for granted, especially in the tourism sector, which "is reaching a certain limit in terms of capacity".
