Home refurbishment is probably also rising sharply. Overall, the supply of capital to households has increased sharply. Debt accumulation was somewhat more than 11 per cent in 2004 and is now considerably higher than growth in household disposable income. This largely reflects the sharp rise in house prices since the mid-1990s. According to TNS Gallup’s consumer confidence indicator for the first quarter of 2005, households are still highly optimistic with regard to their personal finances and the domestic economy. Our regional network confirms this impression, with reports of strong growth in companies that provide goods and services to households. On the whole, household consumption and housing investment are projected to show fairly strong growth over the next few quarters. Even with a strong upturn in the mainland economy, the increase in the number employed has been relatively modest. Productivity rose fairly sharply in the first few quarters after economic growth picked up. Normally, when productivity growth is strong, enterprises again begin to hire new staff. The current upturn has lasted about two years. The fairly low level of growth in employment, as measured by the number of employed, must be seen in the light of the sharp decline in sickness absence through 2004 after rising for several years. The decrease in sickness absence has increased companies’ supply of labour and reduced the need for new employees. Measured in person-hours worked, employment growth was solid last year. The number of person-hours worked rose by 2.2 per cent from 2003 to 2004.
Budgetary policy in 2017 Before going on to specify the broad outlines of budgetary policy for 2017, allow me to remind you that the State and Social Security budget provides only a partial picture of general government activity. In a country as decentralised as Spain, in which more than 40% of public spending is by local and regional government, it is essential to take a broader perspective. Since my speech to the Parliamentary Budget Committee on 25 April, the Government has published (at the end of April) the Updated Stability Programme for the period 2017-2020. This document offers an overview of the budgets of central government agencies along with those of regional and local governments. Moreover, the Stability Programme, by adopting a 4/8  broader time horizon, provides a medium-term plan, which is important for correcting public finance imbalances. The macroeconomic projections accompanying the Stability Programme, which update those included in the draft budget for 2017, involve an extension of the current economic recovery to 2020, albeit with GDP growth gradually slowing from the 3.2% rate recorded in both 2015 and 2016. Specifically, real GDP is projected to grow by 2.7%, 2.5%, 2.4% and 2.4% in 2017, 2018, 2019 and 2020, respectively, while prices are projected to recover, so that nominal GDP growth would stand, on average, slightly above 4% throughout the period. These projections thus incorporate a path of slowing economic growth, which is also present in the forecasts of the Banco de España.