The Diplomat
The International Monetary Fund (IMF) yesterday raised its growth forecasts for the Spanish economy compared to its forecasts of a few months ago and assured that Spain could lead the economic recovery in the EU. However, it warned that the Spanish unemployment rate will continue to be one of the highest in the world.
According to the IMF’s Global Economic Prospects report, corresponding to the month of April and published yesterday, the Spanish economy will grow by 6.4% in 2021, which raises by half a point the forecast of last January, when it reduced GDP growth forecasts from 7.2% to 5.9%. However, this growth is lower than that forecast by the Government in the General State Budget, which is 9.8%. Last Monday, the Second Vice-President and Minister of Economic Affairs, Nadia Calviño, admitted that the Executive could revise its forecasts downwards due to the effects of the third wave of COVID-19 and the Filomena storm.
Apart from this, the Fund’s forecast places the Spanish economy at the head of the recovery in the European Union. According to the IMF, the GDP of the EU as a whole will grow by 4.4% (compared to 4.2% in January) in 2021, France’s by 5.5%, Italy’s by 4.2% and Germany’s by 3.6%. By 2022, the IMF forecasts that the Spanish economy will rise by 4.7%, compared to 3.8% for the EU. The President of the Government, Pedro Sánchez, assured yesterday in a press conference that Spain is “the developed economy that is going to grow the most in 2021 together with the United States”.
Despite these data, the IMF report warns that the Spanish labor market will continue to suffer the impacts of COVID-19 beyond the economic recovery and that our country’s unemployment rate will be 14.4% in 2026, higher than 14.1% in 2019. Spain’s unemployment rate will reach 16.8% in 2021 (compared to 15.5% in 2020) and will fall to 15.8% in 2022, 15% in 2023 and 14.5% in 2024. In any case, the Fund assures that unemployment in Spain will not suffer a drop as significant as that of the 2008 financial crisis, when it went from 8.2% in 2007 to 26% in 2013.
