IMF improves forecast on Spain

 

Yesterday the IMF increased its forecast for growth of Spain' economy Spanish for 2011 and 2012, but predicted that neighbouring Portugal would slip into recession over the same period.

In its quarterly World Economic Outlook report, the IMF stated how it now expects Spain's GDP to grow by 0.8% in 2011 and by 1.6% in 2012, an increase of 0.6% and 1.5% from the previous forecasts. The Spanish government's estimates for the same period remain optimistically higher, at 1.3% and 2.3%.

The report also predicted how Spain's real estate market would remain down for this year, with house prices continuing to drop. An improvement in employment was also seen as very unlikely due to austerity measures, the costs of strengthening the financial sector, and growth below the economy's potential. However, its forecast for unemployment forecasts are less pessimistic than the government's at 19.4 % for this year and 18.2% for 2012.