PM Rajoy sees Spain's economy expanding at faster pace than expected

FXStreet (Łódź) - Spanish PM Mariano Rajoy delivered the annual state-of-the-nation speech before Parliament on Tuesday in which he assured that Spanish economic growth will most probably exceed expectations this year, contributing to much-needed employment creation.

Rajoy suggested that Spanish GDP should rise by 1.0% this year, compared with the previous forecast of 0.7% growth, while in 2015 it could pick up to 1.5%.

Furthermore, the Spanish PM announced plans for bringing down the income tax for middle and lower-income workers and for introducing employment creation incentives such as reduced social security contributions for newly hired workers.

Spanish borrowing costs have been consistently dropping in recent months and also earlier on Tuesday the country's Treasury sold 3 and 9-month debt at considerably lower yields than seen previously.

"Spain was seen as dragging Europe down and now it is seen as a driver," Rajoy emphasized in his speech.