April 23, 2021

The IMF cuts its growth forecast for Spain to 5.9% compared to the 9.8% still expected by the Government


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The arrival, even in transit, of the long-awaited vaccines has completely changed the global economic landscape. In his latest forecasts, the IMF improves its estimate of world growth by 2021 in three tenths, to 5.5%. However, the force of the third wave and the restrictions make it apply a forceful cut for Spain, to which its growth estimate worsens by 1.3 points to 5.9%, increasingly far from the Government’s 9.8% forecast, on which the General State Budgets for 2021 are based.

The worsening in 2021 compared to the October forecasts is common in all the European powers, with Spain being the one where it will grow the most this year, since it was the large continental economy that suffered a more intense recession. The IMF believes that 2020 closed with a fall in GDP of -11.1%, two tenths below what the Government expects and 1.7 points better than what the Fund predicted in October. The reasons are that then the IMF did not take into account the growth of the third quarterand, better than expected –with a rebound of 16.4% compared to the second–. Be that as it may, the data supposes a collapse that triples what the world economy contracted (3.5%), doubles the data for Alemanito (-5.4%) and is below Italy (-9.2%) and France (-9%). Only the United Kingdom comes close, with a drop of -10%.

In any case, despite the fact that vaccines lighten the landscape, in Europe and the US the IMF expects the third wave to delay the recovery with a ‘worsening of the forecasts for the very short term, since the measures to contain the virus will stop the activity, “said the chief economist of the International Monetary Fund (IMF), Gina Gopinath.

Thus, the IMF expects the Eurozone grow by 4.2% in 2021 after having contracted by 7.2% in 2020, so that the rebound will continue in 2022 with 3.6%. In 2021 France will grow 5.5%; Germany, 3.5% and Italy, 3%. “He sprouting by the end of 2020 (including virus variants), new restrictions, logistical problems with vaccine delivery and the uncertainty about its acceptance are important counterweights to the favorable news »

By 2022 Spain is once again the country that will grow the most, with a 4.7% estimate, two tenths higher than previously expected. This confirms that the Spanish economy behaves worse in recessionary phases compared to its European peers and better in recovery, in the eyes of the body led by Kristina Georgieva.

China will grow by 8.1% in 2021

In any case, The United States will recover its pre-crisis GDP this year and it will accelerate against Europe: according to the IMF, after falling by 3.4% in 2020, it will grow by 5.1% in 2021 and 2.5% in 2022. But China will be the big winner: it grew by 2.3% on last year and will return to figures above 8% this year (8.1%), with 5.6% in 2022.

According to the body’s calculations, more than 150 countries will continue to have a per capita income lower than 2019 in 2021 while in 2022 the number will have barely dropped to 110. The economic loss caused by the pandemic from 2020 to 2025 amounts to 22 trillion dollars, the institution points out.

Thus, The body calls for the continuation of tax protection measures for companies and workers, although it warns of the effects that a skyrocketing debt can have, both in countries and companies. The best economic policy, in the words of the IMF, is to vaccinate quickly.

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