Spain’s Top Bosses See Three-Year Growth

Spain's Top Bosses See Three-Year Growth

Spain’s Top Bosses See Three-Year Growth

Spain’s top businessmen are upbeat about the country’s economic growth potential, particularly over the next three years, according to KPMG’s report “Global CEO Outlook”.

In fact, the 50 Spanish CEOs interviewed by the consultancy firm were the most optimistic amongst their global peers, with 90 percent forecasting that the upcoming triennium will be more prosperous than the past few years.

The lack of inflationary pressures, lower oil prices and the European Central Bank’s liquidity injections have all contributed to improving the economic environment in Europe. As a result, top executives’ business ambitions have flourished.

And CEOs world-wide are set to hire. In Spain, 70 percent of interviewees indicated they expect to be in hiring mode through to 2018.

This is good news for a country where the unemployment rate – although well off its 26.9 percent peak reached in the first quarter of 2013 – stood at 22.4 percent at end-June.

 

SPAIN GROWTH OUTPACES EUROZONE PEERS

Spain returned to growth in 2014 with an expansion of 1.4 percent, after five years of recession or stagnation following the collapse of a labour-intensive building boom in 2008.

The initial recovery was underpinned by government reforms focusing on the labour market and the fiscal system, as well as measures to encourage the return of foreign investors.

Unpopular tough spending cuts and tax rises were also implemented by the centre-right ruling Popular Party from 2012, aimed at stabilising the country’s public finances. In April, the International Monetary Fund said it expects Spain’s economy to outpace that of its eurozone rivals in the next two years.

Spain’s economy grew at close to four percent in the first half of 2015, putting it on course to return to pre-crisis levels of output by end-2016.

 

CHALLENGES AHEAD FOR BUSINESS LEADERS

But there are still some clouds on Spain’s rosy horizon, which top businessmen must try to dissipate over the next three years. Earlier this year, the government said the economy would create at least two million jobs by 2018 to cut the unemployment rate to about 15 percent.

The problem is that many of these jobs are likely to be on short-term contracts, particularly those related to the tourism industry, which makes up about 11 percent of Spain’s GDP. Spain’s CEOs need to turn this situation around and offer new hires more full-time contracts.

Improving their firms’ competitiveness remains a priority for business leaders, with the goal of increasing exports. The majority are targeting an increase in revenues from exports over the coming years. For almost 90 percent of KPMG’s interviewees, the US market has the most growth potential, followed by emerging markets like Brazil, Russia and China.

For information on investment in Spain, please contact corporate law firm Argali Abogados.

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