MADRID – The economic growth predicted by the International Monetary Fund (IMF) and inflation remains high for longer. Due to the war between Russia and Ukraine, the growth of the Spanish economy slows and is also adjusted, but the IMF expects much from Spain.
Tuesday, April 19, the IMF announced that the Spanish economy will grow less quickly than expected and that there is no end to rising inflation. These adapted predictions have everything to do with the war that is currently going on between Russia and Ukraine.
Adjusted prognosis IMF for Growth Spanish Economy
Since the Russian invasion, the IMF has been announcing its macroeconomic forecasts for 2022 and 2023 for the first time. The organisation expects the Spanish economy to grow by 4.8%. However, just before the outbreak of the war, the growth rate was expected to be 5.8%. Meanwhile, The Bank of Spain continues that the Spanish economy will grow by 7% this year.
The Spanish prime minister already advised that the expected growth in Spain will show a downward trend. Although he confirmed that although it slows down, the war in Ukraine did not mean there Spain would be no growth in the economy.
Big difference expectation inflation IMF and Spanish bank
With regard to inflation, the IMF expects this year to amount to 5.3% and will decrease in 2023 to 1.3%. A decent difference with the prediction of the bank of Spain that expects prices this year will rise to 7.5% and will decrease to 2% in 2023.
For the time being, all analysts are convinced that although the economic growth of many countries has been adjusted down, it will not lead to a recession, with the exception of countries that are directly involved in the conflict. This means Russia, Ukraine, and Belarus.
IMF has great expectations of Spanish economy
In fact, the IMF even expects Spain to pass through proper growth compared to other European countries and that the Spanish GDP will come over the average of the euro countries again. This also has to deal with the blow that the Spanish economy to be processed during the pandemic.
War in Ukraine slows global growth economy
The IMF concludes that the conflict between Ukraine and Russia provides a significant slowdown in global economic growth in 2022. Although many countries are on the same side and have broken trade relations with Russia, the recovery of the economy after the pandemic is hazardous.
The IMF, therefore, adjusts the growth of the global economy by 0.8% in 2022 and 0.2% in 2023. This means that employment and the economy will not be at the level of the pandemic in 2026. In the eurozone, the economy is expected to grow by 2.8%. In January, IMF expected a 3.9% growth for the euro countries.
Also read: War in Ukraine exacerbates Spain´s economic growth