IMF predict further two years of recession for Spain

 

The IMF believes that Spain faces two years of recession as a result of the economic crisis and austerity measures introduced to cut the budget deficit.

Italian Press Agency, ANSA, had access to a draft copy of the IMF's World Economic Outlook report due for publication next week, where the prediction is that Spain's GDP will contract 1.7% this year and 0.3% in 2013. In its September 2011 edition of the report, the IMF cut its forecast for Spain's GDP growth for 2012 from 1.6% to 1.1%.

The IMF's revised forecasts are in line with those of other experts, such as Moody's Investors Service, which does not rule out a contraction in output this year of as much as 2%.

The new PP Government has also yet to release its official growth estimates for this year.

The secretary of state for public administrations, Antonio Beteta, announced earlier this week that it is likely the GDP forecast for 2012 will be for a contraction of 0.5%. However, he said the actual figure will be determined in "consensus with the forecast of the European Union and the IMF."

The IMF is also expected to lower its estimates for global growth this year to 3.3% and to 4.0% for 2013, 0.7 and 0.5 percentage points lower than its September forecasts. It is also cutting its forecasts for the euro zone for this year to a contraction of 0.5% from growth of 1.1% previously. It sees output of the single-currency bloc growing 0.8% in 2013.