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TECHNOLOGY

Spain to invest €600 million in artificial intelligence in plan to transform economy

Spain is to invest €600 million ($725 million) in developing artificial intelligence over the next two years as part of plans to transform its national economy, the prime minister said Wednesday.

Published: 2 December 2020 16:53 CET
Spain to invest €600 million in artificial intelligence in plan to transform economy
File photo of robot unveiled at Barcelona's Mobile World Congress in 2017. Photo: AFP

The programme would run from 2021 to 2023, starting with an initial injection of 330 million euros, Prime Minister Pedro Sanchez said.   

Developing artificial intelligence (AI) is one of the main objectives of Spain's digital transformation programme which was announced in July and is part of a plan to transform the Spanish economy.

Sanchez said the aim of the government's AI strategy was to “align Spain with the leading countries involved in the study and use of reliable artificial intelligence for economic and social development as a tool for economic modernisation”.

The idea was “to generate an environment of trust with respect to the development of an artificial intelligence that would be inclusive and sustainable and have the public at its heart”, a government statement added.   

The public investment will be further boosted by a contribution from Spain's Next Tech fund to encourage entrepreneurship in digital technology.    

The public-private initiative will aim to mobilise private funding worth 3.3 billion euros that will be ploughed into AI and the digital economy, Sanchez added.

In early October, Spain unveiled its EU-funded recovery plan aimed at creating over 800,000 new jobs and yanking the country out of its worst economic slump in decades.

The plan will be funded by the 140 billion euros in grants and loans Spain will receive from a massive EU rescue fund, making it one of its biggest beneficiaries along with Italy.

READ MORE:  Spain unveils 'Recovery and Resilience' rescue plan to create 800,000 new jobs

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ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

Published: 30 May 2023 15:46 CEST
How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

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