Housing boom threatens to cool Spanish economy
April 21st, 2005
Despite a decade of strong performance and rising living standards, further economic reform is needed and a housing boom poses risks, an OECD report warned.
The Organisation for Economic Cooperation and Development said the Spanish economy is heading for growth of 2.7 percent this year and 3.0 percent in 2006, the OECD said.
The Spanish authorities should address high inflation and the housing market and also improve productivity and levels of education. The economy should show growth of 2.75-3.0 percent on average this year and next, exceeding the eurozone average, the OECD’s latest economic survey said.
It put specific growth in 2005 at 2.7 percent and in 2006 at 3 percent. Spaniards had lower income than the average in the eurozone but the difference has been narrowed substantially at a rate of about one percent per year and should continue to fall. However, despite a rise in living standards, the gap between income per person in Spain and in the eurozone was 13 percent in 2003.
