SPAIN’S economic growth this year has been predicted to be better than its European neighbours according to the International Monetary Fund(IMF).
The IMF has raised its 2024 Gross Domestic Product(GDP) growth forecast for Spain by 0.4% to 1.9%.
The Eurozone as a whole comes in at 0.8% while 0.7% is projected for France and Italy, and just 0.2% for the traditional economic power house of Germany.
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Only the United States is predicted to do better among the major developed nations.
In Spain’s case, the IMF highlights that growth will remain strong thanks to the boost in domestic demand and the recovery of the purchasing power of wages.
The improvements expected for Spain and the United States are contributing to world economic growth being bigger than expected in January 2024.
The IMF’s forecast update suggests that global GDP will grow by 3.2% this year, 0.1% more than the previous projection.
It’s exactly the same figure as last year and the same that is being suggested for 2025.
The potential economic fallout from last weekend’s attack by Iran on Israel is a key focus of attention as the International Monetary Fund kicks off its spring meetings in Washington.
On Tuesday, IMF economists presented a first analysis in which they warn that if tensions escalate, it could derail the process of cutting inflation and even delay projected interest rate cuts expected over the next few months.
“At the moment we are not in that scenario and we do not see a sustained increase in the price of oil,” says the IMF’s chief economist, Pierre Oliver Gourinchas.
But the report he has presented includes, as a scenario, a crude oil price rise of 15% and a 150% increase in the cost of maritime transport this year and next.
Gourinchas explained that this would raise inflation by 0.7% globally and could force central banks to maintain a more restrictive interest rate policy than expected.