The International Monetary Fund (IMF) has again improved growth prospects for Spain, whose economy will expand 1.3% this year and 1.7% next, in both cases one tenth more than estimated in July by the international institution.
In this way, the IMF forecast for Spain in 2014 is in line with the latest government forecast, although it is three tenths below the projected growth of 2% in 2015 driven by Moncloa in its macroeconomic last frame.
“The growth has resumed in Spain supported by the external demand and a higher domestic demand , reflecting the improvement in financial conditions and increased confidence “highlights the institution said in its ‘Global Economic Prospects’, presented in Washington.
Following this most optimistic scenario for the evolution of the activity forecast, the IMF also improves its forecasts for the labor market Spanish and hopes that the unemployment rate will close 2014 in 24.6% to 23.5% loss in 2015
This past July, the institution run by Christine Lagarde predicted an unemployment rate of 24, 9% at the end of 2014 and 23.8% a year later.
Meanwhile, the macroeconomic framework managed by the Spanish government expects the unemployment rate will fall this year at 24.7% and 22.2% pass in 2015
“There will be deflation, inflation will be low.” So he has expressed his views on the future of prices in Spain Thomas Helbling, one of those most responsible for macroeconomic analysis Monentario International Fund (IMF). Hölbling said that “from a technical point of view, Spain is in deflation,” ie, a sustained drop in prices, but that the country “is on the path of growth” thanks to the reform of the labor market, banking reform and reform of the balance, ie the fall of indebtedness. This should make Spain avoid deflation.
The Fund’s chief economist, Olivier Blanchard, said “Spain needs to avoid deflation,” which seems to be achieved not only because it is growing, but because a part of the expansion is due to “the domestic demand “, which should cause prices to throw up. However, the Outlook report World Economic IMF, which was released today, puts Spain as one of the economies with higher risk of deflation, after Greece. The statement is based on an indicator made by the Fund include housing prices.
Other experts do not see things with the same optimism that the IMF. Desmond Lachman, an economist at the conservative American Enterprise Institute and a supporter of monetarism of Milton Friedman, told this newspaper that “the combination of deflation and debt that is very bad for a country like Spain, because falling prices mean increased debt, which forces them to seek large primary surpluses. And, in a system of fixed exchange rates, such as the euro, that requires some adjustments in public finances which in turn further sink the economy. “
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