MADRID, Jan. 11 (Xinhua) -- The economic situation of Spanish families will remain similar to that in 2018 because the slowdown in growth will not seriously affect them, economics expert and professor at the EAE Business School Jose Ramon Sanchez Galan has said.
"We are still going to be able to get to the end of the month, because even though Spain will see slower growth, we will remain above the European Union (EU) average of 1.9 percent," Sanchez Galan explained to Xinhua in an interview.
"This year is going to be more or less the same as last year... everything will remain more or less the same, although maybe we will have the sensation of being in a complicated situation," he commented.
The Spanish government on Thursday lowered its predictions for this year's economic growth from 2.3 percent to 2.2 percent.
Sanchez Galan stressed that the key priority for the government is to act to lower an unemployment rate of 14.55 percent where 33 percent of young people are out of job.
"We have a serious problem with unemployment. Currently we have one of the highest unemployment rates in the EU and many of the jobs here lack security," advised Sanchez Galan, who nevertheless doesn't believe the unemployment rate will fall sharply in 2019.
"The best way for the economy to grow is for it to create jobs, but we won't create jobs unless the economy grows by over 2.6 percent and that isn't going to happen," he said.
However, he added that the Socialist government of Pedro Sanchez should not be tempted into short-term measures, with half an eye on the general election scheduled for 2020.
"We need structural reforms and that means ending the precarious nature of the job market. We need small- and medium-sized companies to be able to go to the job market in better conditions than now."
"That means help, grants and efforts to promote alternative measures such as new jobs in Research and Development," Sanchez Galan said.
He also highlighted that Spain's public debt is currently 95 percent of its GDP, the eighth highest in the world, according to an EAE study. "Spain doesn't know how to finance its debt," Sanchez Galan said.
"We can't do that based on taxes which strangle the consumer", and thus prevent spending and growth, he stressed.
He said the Spanish economy is based on the tertiary and service sector, which according to the National Institute of Statistics, in 2017 contributed 66.4 percent of GDP, while the industrial sector accounted for just 21.6 percent
"We have an industrial sector with a level of activity of 58 percent, well below the EU average of 70 percent. We have a powerful agricultural sector, which is nevertheless affected by people leaving rural areas. That means the tertiary sector is excessively large," commented Sanchez Galan.
He said the priority of Sanchez's government has to be to present a 2019 budget which will generate confidence among investors and warned against some of the measures such as raising the minimum wage from 733 euros (841 U.S. dollars) to 900 euros a month.
"These are measures which do not look at the economic context," he said, warning that raising the minimum wage could affect employment growth and the ability of small companies to expand.
"We need to generate confidence. That is important," he commented.
