(MENAFN- AFP) Spain on Friday upped its growth forecast for the year and predicted that unemployment would drop both in 2016 and 2017, despite a seven-month political deadlock that has many concerned.
The government said Spain's economy would grow 2.9 percent overall in 2016, up from the 2.7 percent predicted in April -- a figure that had already been put forward by Economy Minister Luis de Guindos.
In a statement, the economy ministry also predicted a drop in unemployment to 18.6 percent in 2016 compared to 20 percent in the second quarter, and then 16.6 percent by the end of 2017.
But it revised its forecast for GDP growth in 2017 down to 2.3 percent from 2.4 percent.
The updated economic forecast was published just hours after the Ine statistics agency said Spain's economic growth had slowed slightly in the second quarter.
GDP expanded by 0.7 percent compared to a 0.8 percent rise in the previous three months, it said.
The economic data comes as Spain remains without a fully-functioning government more than seven months after December elections failed to give any party an absolute majority, leaving a parliament divided broadly among four groupings.
Efforts to forge a coalition were unsuccessful as rival parties were unable to overcome their differences, prompting repeat elections in June with a similar result.
On Thursday, King Felipe VI tasked acting Prime Minister Mariano Rajoy, whose conservative Popular Party came first without an absolute majority, with forming a government.
But he faces an uphill challenge as most other parties refuse to back him, raising concerns that Spain could eventually head to a third round of elections at a crux time.
The country is only just emerging from a damaging crisis, and its economy grew at one of the fastest paces in the eurozone last year, with GDP rising 3.2 percent.
Unemployment in Spain has also dropped to its lowest rate in nearly six years, reaching 20 percent in the second quarter.
But Spain is still the European Union's second worst performer after Greece where joblessness is concerned.
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