The world economy closed better than expected in 2020 and this has caused the International Monterary Fund (IMF) revise upwards the growth estimate for Spain to 6.4% in 2021, five tenths more than what it predicted in January, as published yesterday in its new estimates for April. For 2022, it predicts a growth of 4.7%, identical to its previous forecasts. However, despite this improvement, Spain continues as a red lantern of recovery: it will be the state that has the most cost to close the gap opened during the pandemic. Thus, our country will be the European power with the greatest distance from its GDP pre-crisis in 2022. Eurozone, France and Germany They will have recovered their pre-pandemic activity by that year, while Italy will be closer than our country.
Without going any further, the agency also states that Spain will not recover its pre-crisis level of unemployment (14.1% of the workforce) not even in five years: by then it will continue with 14.5%. The IMF predicts that Spain will close this year at 16.8%, it will fall to 15.8% in 2022, 15% in 2023, 14.5% in 2024 and there it will stagnate at 14.3% in 2025 to to rise again to 14.5% in 2026. Spain would thus be the ninth country in the world with the highest unemployment this year, surpassing the EU to Greece (16.6%). They only remain ahead Venezuela (58.4%), South Africa (29.7%), Sudan (28.4%), Palestine (25.1%), Bahamas (23.9%), Belize (23.2%), Armenia (22.8%) and Bosnia (17.5%).
Likewise, the IMF shows that Spain was the western country where investment and private consumption fell the most (-12.4% in 2020 in both cases) and public consumption increased the most (4.5%). Figures that contrast with the 1.2% more that increased in the Eurozone, 3.3% of Germany, 0.3% in USA, 1.6% of Italy or -3.1% of France. Both investment and private consumption sank above what did the GDP, influenced by dependence on tourism and restrictions.
Public consumption includes the goods and services provided by administrations to citizens (Health, Education, Defense, foreign representation …), also collecting the salaries of employees. For this year, he also believes that it will be the country in the Eurozone that will increase it the most, with 3.9% compared to the 2% average in the common currency, although behind 12% in the United Kingdom and 10.1% in USA.
This divergence will be seen in the deficit and debt figures. The IMF It still does not include the closing of 10.97% of 2020 and shows an imbalance of administrations last year of -11.4%, but it foresees that this year the imbalance will close at 9% of GDP other than until 2022 drop to 5.8% and then go down to 4.9% in 2023 and 4.3% where it would remain stagnant until 2026.
Likewise, without incorporating the 35,000 million from Sareb -which placed public liabilities at 120% of GDP compared to 117% previously-, the IMF estimates that public debt will close this year at 118.4% and believes that it will stagnate 117% in the next five years, with 117.3% in 2022 and 2023, 116.8% in 2024 to rebound to 117.7% in 2025 and end 2026 at 118.4%. When you include the Sareb, these numbers will be higher.
Private consumption will increase by 6% this year, a rate that will not make it possible to recover what was lost last year. The IMF itself points out that one of the great challenges will be to ensure that skyrocketing savings are channeled in the form of consumption in all countries.
In this way, Spain comes out as the economy that will take the longest to sew open wounds in the crisis at a time when the body pulls the ears to the Eurozone and emerging countries as those that are lagging the most in the recovery. Despite this, the major flat of estimates in the wake of the upward revision of the world economy improves, which will grow 6% in 2021 -five tenths more than predicted in January-, and 4.4% in 2022 -two tenths more-. The reason is that global GDP contracted less than originally expected in 2020, by -3.3%, which showed a recovery greater than expected in the second half of last year, after “the restrictions and economies will adapt to new forms of work. To this are added the stimuli approved by the US and the acceleration of vaccination in the second half of 2021.
Thus, the IMF improves the forecast also for USA 6.4% (1.3 points more than in the previous estimate) and 3.6% in 2022 (half a point up). As a comparison, it is true that the IMF puts Spain and the United States as the countries that will grow the most among the Western powers, but Spain destroyed 11% of its activity last year compared to the 3.5% that the North American giant gave up . Meanwhile, China accelerates far with growth of 8.4% this year and 5.6% in 2022. The IMF warns of an uneven recovery, with the countries with lower income in the worst situation. The population living in extreme poverty has increased by 95 million worldwide since the pandemic broke out.
The improvement is less in the Eurozone, from just two tenths in 2021 and 2022, to 4.4% and 3.8% growth each year respectively. After falling 8.2%, France it will grow 5.8% this year (three tenths more than what it saw in January) and 4.2% in 2022; Germany it contracted by 4.9% in 2020 and will advance by 3.6% this year (one tenth more) and 3.4% the next (three tenths above the previous estimate); while Italy, after -8.9% in 2020, it will grow 4.2% in 2021 (1.2 points more) and 3.6% in 2022 (same forecasts).
Anyway, the forecast of IMF GDP growth is still very far from that of the Executive itself, which drew up the Budgets for 2021 based on a rebound of 9.8% – or 7.3% without the impact of European funds, which the IMF does include. The president of the Government, Pedro Sanchez, announced yesterday that the Minister council next Tuesday will approve the Recovery and Resilience Plan to send it to Brussels, an essential requirement to get the 27,000 million in European funds. The situation of the economy is pressing.