IMF Predicts Greater Economic Improvement for Spain in 2017

Spain has to be the best place to live in the EU and has so much 

going for it.

The International Monetary Fund (IMF) upgraded the economic outlook for Spain this week based on the explosion of the tourism sector, strong export market, and growing demand from domestic consumers.

The Spanish economy is now expected to grow by 3.1% according to the IMF. It’s last forecast from April suggested the Spanish economy would grow by 2.6% in 2017.

The upgrade means that Spain is one of the leaders of the EU when it comes to economic success and growing GDP. The IMF added that it was impossible to rule out the idea that Spain might be upgraded again later in the year, especially if more records are broken in the tourism sector this year.

It’s more than just the perpetual attraction of the country for holidaymakers that is boosting the Spanish economy. The IMF were also keen to praise how the government’s reforms in the economy and labour market created momentum, stressing the growing consumer confidence and demand. Altogether, it could create a virtuous circle where money is spent, jobs are created, and the economy expands.

While the government should be trying harder to tackle the problems of youth unemployment and wage suppression, the performance of the Spanish export sector shows the quality of the standards and the competitive nature of Spanish industry according to the IMF.

Spanish GDP rose by 3.2% last year, with growth of over 2.5% in 2015. When it comes to 2018, economists believe that the Spanish economy will continue to grow, especially as the construction and property sectors continue to grow and offer their support.

IMF Praises Spanish Economy Recovery

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.