IMF lowers Spain's growth forecasts for the next year and for the next year

IMF lowers Spain's growth forecasts for the next year and for the next year ...

MADRID, 22 Dec. - The International Monetary Fund cut Wednesday its forecast for Spain's economic growth this year and a major future economic expansion project, citing the lingering impact of the coronavirus pandemic on contact-intensive industries, and persistent global supply bottlenecks.

The IMF says it expects the economy to grow by 4.6% in 2021, up from 5.7% released in September & 5,8% in 2022 after 6.4% earlier than expected. Spain's GDP fell by another ten percent last year.

The new figures do not meet the European Commission and the Bank of Spain forecasts, but below the government's highest 6.5% growth forecast for this year.

The Fund said it would not expect that Spain's economic activity to return to pre-pandemic levels before it is late 2022 or then its beginning 2023, according to its article IV report.

The IMF continues to support current stimulus measures and planned reforms, while stating it is difficult for me to say that this fiscal imbalance will likely be reversed by the medium term.

"Spain needs to drop the debt level to more prudent levels and create space for the future shocks," the letter said. "It was an indication that 2023 is the right time to start fiscal consolidation."

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