January 28, 2021

DAVOS 2020: The IMF subjects Spain to the largest growth reduction in developed countries | Economy


The International Monetary Fund (IMF) launches a warning signal for the Spanish economy: the slowdown in domestic demand and exports is becoming more intense than expected in October and its consequences will be strongly noted in this year’s growth. After the reduction of forecasts carried out by the agency three months ago, The new government opens with another growth cut to 1.6% for this year and the next one, two tenths and one, respectively, less than expected in October.

This is the largest reduction in forecasts among developed countries that, in general, will grow at the rate expected in October or one tenth below, in the worst case. Only Japan will grow two tenths more than expected, the Fund calculates, but that hardly means reaching 0.7%. In the Spanish reduction has also influenced the downward update carried out by the INE in the series the historical series, which he did not include in his October estimate. The new statistic reveals that the economic slowdown in Spain has been more acute than initially estimated.

Growth in the United States will moderate from 2.3% in 2019 to 2% this year and 1.7% next year, now that the effects of the tax reduction have already been diluted. The growth of the euro zone, however, will rebound from 1.2% to 1.3% this year, due to the aforementioned reduction in Spain and Germany, where the industry was still in red numbers at the end of 2019.

The Fund has presented its new growth forecasts on Monday within the framework of the World Economic Forum (WEF), as it has been doing in recent years. According to their calculations, after growing 2.9% in 2019, the world economy will grow this year by 3.3% and 3.4% in 2021, one and two tenths, respectively, below what was calculated three months ago . The origin of the reduction goes through an “unexpected” negative behavior in a few emerging economies, but especially in India.

Just when his Government presumed to have surpassed China in growth rate, the subcontinent will grow this year by 5.8%, 1.2 percentage points below the estimated. By 2021, growth will rebound to 6.5%, still nine tenths less than expected. The Asian giant will continue the path to moderation with a growth of 6% this year, one tenth less than the previous one, and 5.8% in 2021. However, the trade agreement sealed with the US allows China to recover two tenths since October.


World economy

Advanced economies

USA

Euro zone

Germany

France

Italy

Spain

Japan

United Kingdom

Canada

Other economies

Emerging and developing

Asia

China

India

European countries

Russia

Latin America and the caribbean

Brazil

Mexico

East M. and Central Asia

Saudi Arabia

Sub-saharan africa

Nigeria

South Africa

2.9

1.7

2.3

1.2

0.5

1.3

0.2

2.0

1.0

1.3

1.5

1.5

3.7

5.6

6.1

4.8

1.8

1.1

0.1

1.2

0.0

0.8

0.2

3.3

2.3

0.4

3.3

1.6

2.0

1.3

1.1

1.3

0.5

1.6

0.7

1.4

1.8

1.9

4.4

5.8

6.0

5.8

2.6

1.9

1.6

2.2

1.0

2.8

1.9

3.5

2.5

0.8

3.4

1.6

1.7

1.4

1.4

1.3

0.7

1.6

0.5

1.5

1.8

2.4

4.6

5.9

5.8

6.5

2.5

2.0

2.3

2.3

1.6

3.2

2.2

3.5

2.5

1.0

World economy

Advanced economies

USA

Euro zone

Germany

France

Italy

Spain

Japan

United Kingdom

Canada

Other economies

Emerging and developing

Asia

China

India

European countries

Russia

Latin America and the caribbean

Brazil

Mexico

East M. and Central Asia

Saudi Arabia

Sub-saharan africa

Nigeria

South Africa

2.9

1.7

2.3

1.2

0.5

1.3

0.2

2.0

1.0

1.3

1.5

1.5

3.7

5.6

6.1

4.8

1.8

1.1

0.1

1.2

0.0

0.8

0.2

3.3

2.3

0.4

3.3

1.6

2.0

1.3

1.1

1.3

0.5

1.6

0.7

1.4

1.8

1.9

4.4

5.8

6.0

5.8

2.6

1.9

1.6

2.2

1.0

2.8

1.9

3.5

2.5

0.8

3.4

1.6

1.7

1.4

1.4

1.3

0.7

1.6

0.5

1.5

1.8

2.4

4.6

5.9

5.8

6.5

2.5

2.0

2.3

2.3

1.6

3.2

2.2

3.5

2.5

1.0

Variation with

the forecasts

October

World economy

Advanced economies

USA

Euro zone

Germany

France

Italy

Spain

Japan

United Kingdom

Canada

Other economies

Emerging and developing

Emerging and developing Asia

China

India

Emerging and developing Europe

Russia

Latin America and the caribbean

Brazil

Mexico

East M. and Central Asia

Saudi Arabia

Sub-saharan africa

Nigeria

South Africa

2.9

1.7

2.3

1.2

0.5

1.3

0.2

2.0

1.0

1.3

1.5

1.5

3.7

5.6

6.1

4.8

1.8

1.1

0.1

1.2

0.0

0.8

0.2

3.3

2.3

0.4

3.3

1.6

2.0

1.3

1.1

1.3

0.5

1.6

0.7

1.4

1.8

1.9

4.4

5.8

6.0

5.8

2.6

1.9

1.6

2.2

1.0

2.8

1.9

3.5

2.5

0.8

3.4

1.6

1.7

1.4

1.4

1.3

0.7

1.6

0.5

1.5

1.8

2.4

4.6

5.9

5.8

6.5

2.5

2.0

2.3

2.3

1.6

3.2

2.2

3.5

2.5

1.0

–0.1

–0.1

–0.1

–0.1

–0.1

0.0

0.0

–0.2

0.2

0.0

0.0

–0.1

–0.2

–0.2

0.2

–1.2

0.1

0.0

–0.2

0.2

–0.3

–0.1

–0.3

–0.1

0.0

–0.3

0.0

0.0

0.0

0.0

0.0

–0.1

–0.1

0.0

0.0

0.0

0.1

–0.2

–0.3

–0.1

–0.9

–0.1

0.0

0.0

–0.1

–0.1

–0.3

0.0

0.0

–0.2

0.0

–0.4

The IMF subjects Spain to the largest growth reduction in developed countries



The IMF presided by Kristalina Georgieva acknowledges the contribution to this scenario, despite everything, positive, of the change in bias in monetary policy towards a much more accommodating position, a turn led by the Federal Reserve of the United States. According to their calculations, “without this monetary stimulus, the estimate of world growth in 2019 and the projection for 2020 would have been 0.5 percentage points lower in each of those years,” he said in a report.

And although the body observes “incipient signs of stabilization” thanks to the relaxation in the US-China trade war, the IMF does not have them all with it –Faint stabilization, slow recovery? “, title summarizes your quarterly report. The Fund conditions the expected performance of the global economy to avoid both a new escalation of commercial, economic and industrial tensions between the two powers and the US with its other business partners, especially Europe, and “that the ramifications economic consequences of social unrest and geopolitical tensions remain contained, “he emphasizes. The agency repeatedly reiterates throughout the report its concern about the impact on the growth of protests that have occurred over the past year at such disparate points as Chile, Hong Kong, Lebanon or Iran.

To combat all these downside risks, the IMF emphasizes the need for strong multilateral cooperation, especially in relation to the World Trade Organization and the distribution of the reduction of greenhouse gas emissions, as well as the Fight against tax evasion. On the social side, the agency insists on the need to expand inclusiveness and social protection networks. “At this stage, policy failures would further weaken a world economy that is already precarious,” he emphasizes.

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