Should such barriers actually be introduced, there would be a negative impact on world trade that could affect an economy, like Spain's, whose recovery has been largely export-led. In the same vein, uncertainty about the implications of the United Kingdom leaving the EU remains high, in a setting in which the Spanish economy has significant exposure to this country in terms of services exports and financial ties. This uncertainty is also affected by the context of low returns in Europe's financial system and of the fragility of certain institutions. On the domestic front, several factors of vulnerability persist. One of them arises from the level of public indebtedness (which I will refer to later) and that of certain segments of the household and corporate sectors, which entails high reliance on foreign saving and represents a source of weakness in the face of possible increases in the cost of borrowing. Also, despite efficiency improvements, our economy remains highly sensitive to potential increases in commodities prices, particularly, oil prices. From a medium-term perspective, the high structural component of the unemployment rate, an ageing population and low productivity are the main factors limiting the sustained growth of our economy. I shall now review the main features of the budget. Budgetary policy in 2017 The macroeconomic forecasts accompanying the draft State and Social Security Budgets for 2017 involve the prolongation of the current expansionary phase. Specifically, they estimate real GDP growth of 2.5%, accompanied by a recovery in prices, so that nominal GDP growth is slightly above 4%.
As for global economic activity, the figures for the last quarter of 2016 show higher-thanexpected GDP growth in advanced economies, except in the United States; in emerging economies there were clear differences with robust growth in Asia, that prompted a moderate rise in international trade, and a further slowdown in Latin America. Similarly, indicators published in the first quarter have been somewhat more favourable than expected. In the euro area, despite the presence of the above-mentioned factors of uncertainty, the most recent economic developments show a firming of the recovery, although its strength across countries is uneven. The ECB's most recent projections in March indicate that the current phase of recovery will persist and that GDP growth in the euro area will continue to be underpinned essentially by domestic demand, with forecast growth rates of 1.8% and 1.7% for 2017 and 2018, respectively, similar to that observed in 2016. Euro area inflation climbed to 2% in February, mainly reflecting temporary factors linked in particular to energy prices, which will unwind over the year. In fact, headline inflation in the euro area slowed to 1.5% in March and core inflation (excluding energy and unprocessed food) stood at 0.7%. From a medium-term perspective, the ECB projection exercise points to inflation moving on a very gradual upward path, with the result that, towards the end of 2019, it would still stand below 2%.