IMF-Economy Spain Zero
2022.11.23 10:39
IMF-Economy Spain Zero
Budrigannews.com – In its country report released on Wednesday, the International Monetary Fund predicted that Spain’s economic growth would slow in 2023 as a result of rising prices and waning demand before returning to pre-pandemic levels in 2024.
According to the IMF’s report, consumer confidence is expected to drop in the coming quarters as a result of the cost of living crisis and weak demand.It said that activity will pick up toward the end of the year, helped by spending on recovery funds from the European Union and increased supply.
In a call with journalists, Dora Iakova, IMF mission chief for Spain, stated, “We do not forecast a technical recession, but growth will be close to 0% in the last quarter of this year and the first quarter of 2023.”
The International Monetary Fund (IMF) forecasts that gross domestic product will increase by 4.6% in 2022, up from its previous forecast of 4.3% in October, and slow to 1.2% in 2023, which is higher than the average for countries in the euro zone. However, the IMF warned of numerous downside risks, particularly the impact of energy prices.
The strong labor market and a particularly strong performance by tourism and other services are to blame for the improvement.
The IMF added that the country’s industrial output is expected to reach pre-pandemic levels by early 2024, and that headline and core inflation are likely to remain above the 2% target set by the European Central Bank.
According to Iakova, core and headline inflation will converge in 2023 at around 4.5 percent.
The report regrets that the measures were not targeted and have resulted in market distortions, despite its praise for the swift rollout of government support to lessen the impact of rising prices.
“A large portion of the monetary help has gone to measures that are untargeted and contort cost signals, for example, power charge decreases and fuel discounts.”The benefits have disproportionately benefited households with higher incomes, and the latter have been fiscally costly,” the IMF stated in the report.
