IMF economic forecasts 2014-2015: a long way to recovery

Spanish economic position strengthened

Spain has now overcome the most serious part of the economic crisis:  External demand and a rise of internal consume within Spain have improved the country’s financial conditions and market confidence. This development is reflected by the International Monetary Fund’s (IMF) surveillance. As only country of the European Union Spain has improved its economic forecasts proclaimed by the IMF. This month’s surveillance by the IMF estimates the growth rate one tenth percent higher in 2014 (1.2%) and 2015 (1.6%) than in July.


Spanish GDP’s growth rate rising and unemployment rate dropping

Comparing the foreseen growth of the average European Union’s GDP and the Spanish GDP, the latter is expected to grow 0.5% more than the general average of the European Union’s GDP. The average Union’s growth is expected to increase by 0.8 % in 2014, whilst Spain’s GDP is expected to increase by 1.3 %.  Moreover, the last three months of this year the growth rate is estimated to reach even 2.0 % in Spain. In 2015 Spanish average GDP growth is estimated 1.7%, so still four tenths percent more than the Union’s growth rate and two tenths percent more than Germany’s expected growth rate.

The expected unemployment rate has improved since the last forecasts for this year in July: A drop down of three tenths is expected for 2014. The average unemployment rate is estimated to sink further by 1.1 % in 2015.


Further measures to strengthen Spanish economy

To support the positive outcomes, the Spanish ministry of economy and competitiveness has recently adopted new measures, within the plan ICEX, to promote the internationalization of business and attract foreign investments within Spain. Companies can apply with maximum of two projects simultaneously within the target fields to receive a maximum financial support of € 65,000.

The Spanish minister of economy and competitiveness foresees further positive surprises in the labor market during the next years.


Notwithstanding the optimistic forecasts referred to above, Spain has still a lot of work to do. It is clear, so is it expressed by the IMF, that implementing additional reforms to the ones carried out so far is an elementary step in order to solve (or try to solve, at least) the main problems that currently affect Spain’s economy. The aforesaid reforms should lead (throwing in a huge dose of optimism) to the following achievements: a decrease of the private sector debt, an improvement of the labor market (especially with regard to the youth unemployment rate), an increase of indirect taxes (such as VAT) and a reduction of social contributions.

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