Emu Country Analysis: Spain

A SUPPLEMENT TO EUROMONEY

Spain
Central Hispano

On the right track to Emu in 1999

Spain’s chances of joining Emu in 1999 increased significantly in 1996, underscored by the sharp decline in the 10-year yield gap with Germany (to 145bp in November from 367bp in January). Lower inflation, a reduced budget deficit and expectations of further improvements in 1997 make it likely that Spain will meet the Maastricht conditions (see graphs).

The outlook for inflation in 1997 is quite good.