BarcelonaThe International Monetary Fund has shown optimism about the Spanish economy, despite the caution when analyzing the evolution of the world economy as a whole. The body presided over by Kristalina Georgieva presented this Tuesday its report on economic prospects, which places Spain as the advanced country with greater growth, even above the United States.
Thus, according to the report, the IMF predicts a growth of 2.9% in Spain this year, five tenths more than the last forecast, published in July. The figure is at similar levels to other forecasts, such as those of the Organization for Economic Cooperation and Development (OECD, the think-tank of the most industrialized states), which forecasts 2.8% growth this year in the State. The Spanish government places the expected growth at 2.7%, and the Bank of Spain also at 2.8%.
THE 2.9% forecast by the IMF for Spain is even a tenth higher than the forecast for the USA, which is usually one of the economies with the highest growth rates, and triple the figure for the euro zone . Even so, towards 2025, the international institution expects the Spanish gross domestic product (GDP, the indicator that measures economic activity) to expand by 2.1%, still far from 1.2% of the Eurozone, but below the levels of the United States and Canada.
“In the first half of the year what we have seen is that exports have been very strong and part of this is due to tourism, but also private consumption and public investment have been strong,” explained Petya Koeva Brooks, director deputy of the IMF’s research department, in statements collected by EFE. Koeva Brooks believes that the good performance of the investment is due to “the impact of some European Union funds that are being absorbed”.
Problems in Europe, caution in the world
Despite the instability caused by geopolitical tensions and conflicts in Ukraine and the Middle East; the tariff war between China and the US and the EU, and the uncertainty caused by the outcome of the US presidential election, the IMF has not touched the forecasts on the growth of the global economy. Thus, it has left them at 3.2% in 2024, the same figure it expects for next year.
In Europe, on the other hand, it has cut the forecast for this year by one tenth, to 0.8%, and from 1.2% for 2025, three tenths less than the July forecast. Germany is the state with the most problems among the large European economies, with an estimated growth for 2024 of 0%, higher than the same forecasts of the German government, which expects the country to close 2024 with a contraction of activity, the same as in 2023. According to Koeva Brooks, the countries that depend most on the industrial sector and exports – Germany would be a paradigmatic case – are the ones that will suffer the most this year. “We expect this to change and the economy to recover in 2025 as a result of stronger real wages, as well as consumer confidence and investment confidence,” the IMF economist noted.
As for the rest of Europe, France sees the IMF increase its forecast by two tenths, to 1.1%, while Italy cuts it by a tenth to 0.7%. Outside the EU, the United Kingdom will grow by 1.1%, according to the IMF, four tenths more than the July forecast.
Discounts on interest rates
The IMF is confident that moderation in global inflation will lead to further interest rate cuts, following the path taken by most central banks from this year. The ECB has already approved three cuts of 0.25 percentage points each to euro zone key rates, but IMF forecasts point to a further cut of a quarter of a point at the December meeting, and that in 2025 it will at least cut them by half a point more, until leaving them at 2.5%.
In the US, the Federal Reserve (the Fed, the American central bank) will approve two further rate cuts this 2024 and four more in 2025, according to IMF forecasts. According to Pierre-Olivier Gourinchas, the IMF’s chief economist, the Fed should focus on ensuring that its policies against price rises do not “hit activity” in the economy.
