IMF raises growth forecast for Spain despite political uncertainty

Lower prices for energy and other commodities may be good news for importing countries such as Spain.

The International Monetary Fund (IMF) has released an update of its World Economic Outlook report, raising its own forecast for Spanish GDP growth over the next two years.

Spanish growth in 2016 is expected to surpass that of the United States, Japan and Canada

In the new scenario, the Spanish economy will grow 2.7% in 2016 and 2.3% in 2017, up two-tenths and one-tenth of a point, respectively, from the October 2015 projection.

The change also represents the biggest upward revision among the world’s biggest economies.

The global agency has decided to raise its forecast for Spain despite the political uncertainty derived from the inconclusive general election of December 20, and the fact that new elections will have to be held if no party or coalition manages to form a government.

By contrast, the ratings agencies Fitch and Moody’s have warned about the potential economic impact of the political impasse.

The IMF follows in the footsteps of the Bank of Spain, which raised its 2016 growth forecast to 2.8% two days after the general election.

But the seven-page IMF report does not provide any specific details about Spain, or about why the growth prospects have been bumped up from the earlier projection. In any case, the new forecast is more in line with that of other expert bodies, which talk about 2.7% growth for this year and 2.4% for 2017.

Spanish growth in 2016 is expected to surpass that of the United States, Japan and Canada, putting it at the top of the world’s developed economies. In 2017, the US will take the lead again.

English version by Susana Urra.