The IMF’s warning that high unemployment and low productivity lastrarán Spain – TVN Panama

In the final statement of the IMF mission to Spain, the agency stresses that thanks to the “impressive reforms” introduced during the crisis the economíaespañola is now more resilient and enjoys a “vigorous recovery”, but points out that there are challenges of a structural nature that require a medium-term strategy.

in Addition, the agency believes that, after the deep fiscal adjustments adopted between 2010 and 2013, Spain needs to continue with the process of public deficit reduction “at a rate more calibrated” that is compatible with the growth of the economy and employment, but to lessen the high volume of public debt.

In this sense, says that Spain “can’t afford” an increase in revenue through reform of VAT and increase in excise taxes and rates environmental, so that they move the tax burden from direct taxation to indirect.

with Respect to the expense, believes that it could be more efficient by in-depth reviews of costs, especially in health and education.

in Addition, points to three areas in which it could act immediately for those who believe that there can be a broad political support: the improvement of active employment policies, the reform of the system of financing autonomous (regional) and the improvement of the effectiveness of policies in the field of innovation and education to increase productivity.

The labor reform and wage moderation of recent years have allowed the job market is now “more resilient to shocks”, according to the IMF, which affects, however, in that most of the new jobs are temporary in nature and that the differences between temporary and fixed accentuates the volatility of employment and is not conducive to investment in human capital.

Considers a priority to promote the creation of employment among the long-term unemployed and young people of low qualification to what urges better coordination of the State with the regional governments.

it Also proposes incentives for hiring and make them more attractive to employers,” open-ended contracts.

the final statement, the IMF believes that the labor reform has contributed to improve the competitiveness and productivity of firms, but thinks that it would incrementarlas more so that Spain could maintain medium-term growth of the economy greater than 2 %.