World Bank : Economic situation in Spain is 'very serious'

The World Bank has commented how the economic situation in Spain is “very serious” but also said how the fiscal austerity measures recently taken by the Government were in the “right direction.”

The World Bank's director of World Bank macroeconomic trends commented “I think the situation in Spain is very serious and with extremely high unemployment” during a press conference which introduced this year's Global Economic Prospects report.

He went on to say that it was “probable” that the fiscal consolidation measures implemented by the Spanish Government will reduce its risky position. He also mentioned that market indicators show that investors see the situation in Spain as less serious than that of Greece or Portugal.

The World Bank forecasts that the world economy will grow between 2.9 and 3.3 percent this year and next, above the 2.7 percent it forecasted in January 2010 and 3.2 for 2011.

The agency believes that the current crisis in Europe is a major threat to global growth.