IMF improves its growth predictions for Spain in 2021 to 6.4%

IMF improves its growth predictions for Spain in 2021 to 6.4%

The IMF updated its predictions and raised the forecast increase for this year for the Spanish GDP in 0.5% to 6.4%.

If last January, the IMF moderated its predictions concerning the Spanish economy, going from an initial 7.2% to 5.9%, now it placed the country above the main eurozone powers, with a growth which will be level with that of the United States.

The IMF expects Spain will start moderating its growth next year, after experiencing one of the deepest drops amongst the more advanced economies in 2020, with an 11% yoy drop. Thus, the estimates for 2022 remain above 4.7% and in the following years it will continue slowing down until it will reach only 1.4% in 2026.

The IMF’s prediction remains far from those announced by the Spanish government, which expects a 7.2% growth. The government explained it may revise its predictions and change them in the next few days.

For the whole of the European Union, the IMF estimates the economy will grow 4.4%. In terms of the more powerful countries within the eurozone, it forecasts very different numbers. Thus, for Italy the IMF forecasted the economy may grow around 5.4% this year. For France and Germany, it predicted increases of 5.8% and 3.6% respectively. Concerning China, the only great economy which closed 2020 on the rise, the IMF expects an 8.4% increase in 2021.

Globally, the IMF expects internal demand to grow 4.5% this year, following the 6.5% drop registered in 2020. Next year, it estimates the increase will be around 2.3%. In terms of private consumption, it forecasts a 6% increase this year and a 3.3% increase in 2022.

The fund also predicts public consumption will continue its rising trend and increase around 3.95% although in 2022 that increase will drop to 0.4%. In terms of unemployment, the IMF estimates that it will be set at around 16.8% and drop to 15.8% next year.

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