MADRID, July 29 (Reuters) - Spain's acting government on Friday hiked its growth forecast for 2016 to 2.9 percent from 2.7 percent previously, though it trimmed its outlook for 2017 to 2.3 percent from an earlier 2.4 percent.
The latest changes to Spain's forecasts come amid a prolonged period of political paralysis, after two national elections in the last six months delivered hung parliaments, complicating the formation of a new government.
Momentum in the labour market, which is recovering after a deep recession, has kept growth powering ahead in the first half of the year.
The caretaker conservative government presented a slightly more upbeat outlook for jobs on Friday, projecting the unemployment rate would drop to 18.6 percent of the workforce by year-end rather than 18.7 percent previously. The jobless rate stood at 20 percent in the second quarter. (Reporting by Sarah White and Paul Day, Editing by Julien Toyer)