MADRID, December 22 (Reuters) – The International Monetary Fund on Wednesday lowered its economic growth forecast for Spain this year and next, citing the lingering impact of the coronavirus pandemic on contact-intensive industries and continued bottlenecks in the global supply.
The IMF now expects the economy to grow by 4.6% in 2021, down from its previous forecast of 5.7% published in September, and 5.8% in 2022 after 6.4 % previously estimated. Last year, Spain’s GDP fell by a record 10.8%.
The new figures are in line with forecasts from the European Commission and the Bank of Spain, but well below the government’s growth estimate of 6.5% for this year.
Spain’s economic activity is not expected to return to pre-pandemic levels until late 2022 or early 2023, the Fund said in its annual Article IV report on the Spanish economy. .
While the IMF backs current stimulus measures and planned reforms, it warned that the fiscal imbalance in public accounts will need to be reversed in the medium term.
“Spain will need to bring debt levels down to more prudent levels and create space to respond to future shocks,” he said, suggesting that 2023 is the time to start fiscal consolidation.
(Reporting by Inti Landauro and Belén Carreño; editing by Andrei Khalip)
((Inti.Landauro@thomsonreuters.com;))
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