The IMF raises Spain’s growth to 5.2% in 2022 but cools that of 2023

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The International Monetary Fund (IMF) has significantly raised its GDP growth forecast for Spain in 2022, which rises to 5.2% from 4.6% last November, although has cut the projection for this year by one tenthwhen you expect a 1.1% expansionaccording to the projections included in the conclusions of the consultations for the ‘Article IV’ report on the Spanish economy.

According to the international institution, the slowdown in growth projected for Spain in 2023 compared to last year “reflects the effects of high energy and food prices, tighter financial conditions, and weaker external demand.” Thus, the IMF expects activity to reach its pre-pandemic level at the beginning of 2024, when it expects GDP to grow by 2.4% and at a rate of 2.2% in 2025. Regarding inflation, the institution calculates an average increase in prices in 2022 of 8.4%which will moderate this year to 3.7% and 2.7% in 2024, standing at 2.1% in 2025.

However, taking into account the data at the end of the year, by 2022 it estimates a inflation of 5.8% that will drop to 3.8% at the end of 2023 and 2.4% a year later, to stand at 2% at the end of 2025. Likewise, the IMF expects the unemployment ratewhich stands at 12.8% in 2022, will remain stable in 2023 to drop to 12.5% ​​next year and up to 12.3% in 2025.

on your side, public debt will be 112.1% of GDP in 2023, after closing 2022 at 112.8%, to drop to 110% next year and up to 109% a year later. IMF Executive Directors praised Spain’s economic resilience and the solid performance of the labor market in the context of successive ‘shocks’, includes the document published by the entity.

However, they pointed out that the outlook is subject to great uncertainty given Ukraine’s vulnerability to war spillovers, weaker global demand, tighter financial conditions and high energy prices. In this context, they underlined the importance of flexible macroeconomic policies and carefully calibrated, as well as a strong implementation of the structural reform agenda to support sustainable and inclusive growth.

Calviño views the report as “very positive”

The First Vice President and Minister of Economic Affairs and Digital Transformation Nadia Calviño has assessed the report published by the IMF as “very positive”. The first vice president has highlighted, through a video released by her Department, that the report “endorses” the economic policy of the Government, above all, in relation to the response to inflation and fiscal responsibility. In addition, the head of Economic Affairs has also highlighted the fact that the report on the Spanish economy endorses the deployment of the investments and reforms of the Recovery Plan “which is already having a significant impact”.

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