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Political uncertainty can undermine Spain's economic growth: BBVA Research

Xinhua, May 12, 2016 Adjust font size:

Political uncertainty could undermine Spain's economic growth, according to information reported by BBVA Research published on Thursday by Spain's economic newspaper Expansion.

According to the report by Spain's second-largest lender Banco Bilboa Vizcaya Argentaria (BBVA), political uncertainty could slow economic growth up to 0.8 percent, a figure that could be higher if political parties are unable to form a government after the new general elections in June.

Spain's economy is expected to grow by 3.0 percent in 2016 and by 3.2 percent in 2017 according to BBVA, but both figures could change due to the political situation in the country.

The bank said so far there has been a limited impact, but warned that these impacts could increase; adding that missing the 2016 deficit target could also have negative effects on the country's economic growth.

To this aim, BBVA encouraged the new government to implement "ambitious reforms" in order to increase potential economic growth.

Meanwhile, the Spanish acting government revised down its economic forecasts in April, from 3.0 percent to 2.7 percent for this year and from 2.9 percent to 2.4 percent for 2017. Endit