Spain managing to hold off impact of global slowdown: IMF report

For the Spanish economy the current advantages of the new international outlook – cheaper oil, weaker euro against the dollar, low interest rates – are having a greater effect than the disadvantages – fewer exports to China, lower demand from Latin America. As a result, it is among the few countries whose growth predictions haven’t been revised downwards in the IMF’s latest World Economic Outlook, presented on Tuesday in Lima, Peru, where this week it is holding its Annual Meetings.

In its report, the IMF once again draws attention to the fact that growth in the Spanish economy is “particularly intensive” in comparison with the euro zone, and is sticking to the forecasts it already made in July, when it predicted that Spanish GDP would increase by 3.1% this year and 2.5% next year. That forecast is somewhat less optimistic than that of the Spanish government – which is expecting growth of 3.3% in 2015 – but it would still be enough to put Spain among the best-performing economies in the EU.

The momentum being gathered by the Spanish recovery is not yet enough for the levels of activity seen before the crisis to return

Among advanced European countries, only Ireland (4.8%), Luxembourg (4.4%), Czech Republic (4.8%) and Slovak Republic (3.2%) will see growth rates higher than Spain’s, according to the IMF’s forecasts. On average, growth in the euro zone will come in at less than half of the Spanish rise in GDP.

But the momentum being gathered by the Spanish recovery is not yet enough for the levels of activity seen before the crisis to return, something that the majority of euro zone countries already enjoy. And the forecasts continue to show that Spain’s unemployment will continue to be the highest in the EU, only beaten by Greece (27%).

That said, the International Monetary Fund has taken the chance to include the more positive economic outlook into its perspectives for the labor market, which it had not changed since July. The organization is now expecting an average unemployment rate of 21.8% for this year and 19.9% next year, figures that are very similar to the Spanish government’s forecasts.