ExpertEye European Automotive Report Q1 2017 | Page 24

Spain – Employment market creating a duality in employment rights
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The economic growth in Spain has far exceeded most economists’
expectations but the recovery is now expected to slowly ease back, although
it still saw a healthy 0.8% rise in Q1. Unemployment remains well above the
EU average but it has seen steady and sustained falls which are expected to
continue at a slightly faster rate than previously expected.
However, the gap between the rights of those in permanent employment
and those finding jobs under temporary contracts is creating a duality in the
workforce. Youth unemployment is still around 40% and some of these
factors can be seen reflected in the recent downturn in the Spanish
Economic Sentiment Indicator.
From a public purse perspective, the general government deficit is
improving thanks to new revenue measures and a positive view on the
macroeconomic outlook although it is not expected to drop below the EU’s
required 3% of GDP until next year which is an improvement over forecasts
set towards the end of last year. Even the public debt now seems to have
stabilised at around 100% of GDP. Inflation is also now picking up, in part
helped by the recovering oil prices, which should see a healthy return to a
sustainable inflationary period over the coming years.
But in a country where diesel still represents over 50% of all sales and with
Madrid set to ban diesel cars from 2025 the lack of investment in an EV charging infrastructure is going to put a strain on government
coffers as it tries to catch up with the rapidly advancing alternative powertrain developments.
European Automotive Report - 2017 Quarter 1
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