Wednesday, October 23, 2024, 10:30
The International Monetary Fund (IMF) was one of the last to update its economic growth forecast for the end of this year, and along with others it revised Spain's growth rate upward. The group, led by Kristalina Georgieva, raised its forecast for gross domestic product (GDP) to grow by 2.9% this year by 0.5 points, slightly higher than the Spanish government's forecast of 2.7%. That was slightly below the forecast released on Monday. financial think tank Funcas (3%);
This growth rate is even higher than the IMF's forecast for the US (2.8%) and three times the growth rate of the euro area. Spain will continue to grow faster than its partner countries by 2025 (2.1% compared to 1.2% in the euro area). However, we are already slightly behind the United States and Canada.
Regarding inflation, the IMF estimates that Spain will cut inflation from 3.4% at the end of 2023 to 2.8% this year, in response to the major price crisis (food, energy, etc.) experienced around the world in recent years. This figure is already below the target recommended by the European Central Bank (ECB). According to IMF calculations, inflation in the euro area is expected to remain at 2% by the end of 2025.
The Ministry of Economy and Finance sees the IMF revision as one of the biggest upward revisions among major advanced economies, making Spain the “largest growing economy this year.” The ministry said that something similar will happen in 2025, with Spain's economy continuing to drive growth in the euro area.
Spain continues to rank at the bottom not only of the Eurozone but also of developed countries when it comes to unemployment. The IMF estimates that Spain's unemployment rate will end the year at 11.6%, 0.5 percentage points lower than at the end of 2023. It also expects the unemployment rate to fall to 11.2% in 2025. These projections are significantly higher than those of the central government, which wants to cut the tax rate to 10% in 2025. This tax rate is double the euro area average, which will be 6% at the end of 2024.
