March 6, 2021

The IMF recommends Spain to be "careful" with the increase in the minimum wage

The IMF recommends Spain to be "careful" with the increase in the minimum wage



The International Monetary Fund (IMF) today urged the Spanish government to be "careful" when implementing the proposed minimum wage, while regretting that the strong recovery has not been used to rebuild "their fiscal space" .

"You have to be careful with minimum wages, on the one hand so as not to exclude people from the labor market, but on the other hand, there is also justification for social issues," explained Poul Thomsen, director of the IMF's Europe Department. press at the annual assembly that takes place in Indonesia.

"One has to balance both" elements, the official added.

Thomsen commented thus on the agreement signed this Thursday between the Spanish Prime Minister, Pedro Sánchez, and the Secretary General of Podemos, Pablo Iglesias, facing the 2019 budgets that includes a historic rise in the minimum interprofessional salary (SMI) of 22, 3%, up to 900 gross euros per month.

The official also paid attention to the limited fiscal consolidation carried out by Spain in recent years given its high debt, which is around 95% of the Gross Domestic Product (GDP).

"Unfortunately, since 2015, when growth has been significantly above potential, and we have had a steady fall in unemployment, Spain has not rebuilt its fiscal space," he warned.

Therefore, he insisted that "fiscal policy should be more countercyclical", that is, take advantage of periods of economic expansion to save and reduce spending.

The IMF placed the estimated growth of Spain for 2018 at 2.7%, one tenth less than that advanced three months ago, and at 2.2% for 2019, still at the head of the large economies of the euro zone but already in a slowdown trend.

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