(Corrected the error in deficit forecast)
WASHINGTON, Oct. 22 (.) – The International Monetary Fund (IMF) has revised upward its forecast for Spain’s budget deficit this year, expecting it to end at 2.9%, two-tenths lower than the financial institution predicted in April. did.
In the framework of the IMF and World Bank’s annual meetings this week, the institutions released their latest World Economic Update (WEO report) on Tuesday, updating their database with debt and deficit projections.
The IMF also forecast Spain’s budget deficit in 2025 at 2.8%, and also kept its forecast for 2026 at 2.8%.
The agency also lowered Spain’s debt outlook for this year to 102.3% of GDP from 106.3% calculated in April.
The government also significantly lowered its 2025 debt outlook to 100.7% of GDP from the previously calculated 104.9%. In 2026, this number will fall to 99.6% of GDP.
On growth, the IMF has raised its 2024 growth forecast by five-tenths to 2.9%, a remarkable figure in the depressed eurozone, where growth is only 0.8% this year.
The data is higher than the Bank of Spain’s forecast, which predicts gross domestic product (GDP) to grow by 2.8%, and the government’s own forecast, which predicts economic growth will be 2.7%.
The IMF said that despite the positive economic outlook, the Spanish government “needs to recognize that in the medium term it is important for Spain and many other economies in the region to once again implement fiscal consolidation.” ” he pointed out. “We will integrate them in stages to replenish our mattresses,” he said, exhausted after the European energy crisis caused by the pandemic and the war in Ukraine.
This was estimated by Petya Koeva Brooks, Deputy Director of the IMF’s Research Department, in an interview with EFE. “I think some of that is already happening, but it will be important to keep it that way over time,” he said.
He added that another challenge for Spain is that it faces high unemployment rates, noting that despite making “a lot of progress”, Spain is “one of the countries with the highest structural unemployment in Europe”. “One,” he added.
“Here, we believe that in the implementation of labor reforms in 2023, it will be very important to use active labor market policies, even at the local level, and to ensure that they are properly implemented. ” he said.
