Spanish economy recovering a year faster than expected

The Spanish economy will recover this year the level of activity prior to the Covid-19 pandemic, according to estimates by the International Monetary Fund (IMF), which has thus brought this milestone forward by one year, after revising its growth forecast by four tenths upwards.

According to the projections of the multilateral organisation, Spain will reach a GDP level of 1,195 trillion euro in 2023, thus exceeding for the first time the 1,193 trillion of 2019, the last full year before the impact of the Covid-19 pandemic and the restrictions implemented to contain it.

In its latest annual report on the Spanish economy, published last January, the IMF expected the country to not recover its pre-pandemic GDP level until 2024.

However, in its report ‘World Economic Outlook’, presented in Washington, the institution led by Kristalina Georgieva, has revised its growth forecast for Spain this year by four tenths, up to 1.5% from 1, 1% that it managed in January, which would allow Spain to more than recover the level of activity lost during these years.

Likewise, the IMF has cooled the intensity of the economic rebound expected for 2024, when it expects GDP growth in Spain of 2%, compared to the 2.4% previously anticipated.

In the longer term, the IMF projections contemplate an expansion of 2% also for 2025, while a year later growth will moderate to 1.7% and up to 1.6% in each of the two remaining years on the horizon. of the forecasts of the institution.

Thus, Spain will continue to grow at a faster rate than the eurozone average during this year and the following two, when the eurozone will grow by 0.8%, 1.4% and 1.9%, respectively, while that in 2026 the euro region will expand by 1.7%, the same as Spain, which will again grow more than the euro zone in 2027 and 2028, since the region will then grow by 1.5% and 1.4%, respectively.

As regards inflation, the IMF projections point to the rise in prices moderating gradually and reaching an average of 4.3% this year and 3.1% next, reducing to 2% in 2025 and from then falling to 1.8% a year later and up to 1.7% in 2027 and 2028.

In the case of the euro area, the IMF expects a slowdown to 5.3% in 2023 from 8.4% last year, moving to an average of 2.9% in 2024 and 2.2% a year later, still above the objective of the European Central Bank (ECB), which it will reach in 2026 with a rise of 2%, which in 2027 and 2028 will moderate to 1.9%.

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