IMF Praises Spanish Economy Recovery
The Spanish economic recovery has been praised by the International Monetary Fund (IMF), the global organisation dedicated to financial stability. They praised the country for undergoing such an impressive turnaround just a few years after suffering from one of the worst recessions of the modern era.
IMF said in their most recently country assessment that the Spanish economy has continued to recover and create jobs. The reforms and measures taken to improve confidence really paid off for the country. This, combined with fiscal loosening and external windfalls has powered the Spanish economic recovery of the past two years.
IMF also praised private consumption, investments, and exports, with a special mention for the past reforms of the government for being a driving force in bringing success and confidence back to the economy.
Prime Minister Mariano Rajoy was the one running things during the lean years, and is now back for his second term as PM. IMF expects that his second term will be known for further positive news for the economy. The IMF particularly praised Rajoy’s reforms of the labour market in 2012, which IMF says supported job creation and growth.
As great as the praise was it wasn’t entirely universal, as the report made the point that the current political climate isn’t good for reforms. Rajoy may be prime minister, but he doesn’t have an absolute majority so any major changes he wants to make could be blocked by his political opponents including the PSOE.
The IMF also made the point that, while the country has good prospects for medium-term growth, it needs to do something about the high amount of structural unemployment in the long term. IMF suggest taking steps to increase the size of domestic companies and removing the barriers for trade between the different regions of Spain.
Even with these suggestions though it’s hard to deny that the Spanish economic recovery has been both surprising and encouraging. The report from the IMF concluded that employment in Spain has risen over 3% annually, with just over a million jobs created in the past two years; a growth that has been supported by reforms to the labour market and wage moderation.
