He International Monetary Fund certifies that the Spanish economy will stop dead in 2023, although it has slightly improved its prospects for this year. In its new global outlook report published this Tuesday, within the framework of the spring meeting in Washington, the IMF now forecasts that after growing 5.5% in 2022, the Spanish economy will hardly advance 1.5% in 2023. The new forecast, in any case, improvement in four tenths the most pessimistic estimate he launched in January, when he estimated his forecast for the Spanish economy in 2023 at just 1.1%. At the same time, however, the IMF has cut its forecast for 2024 by four tenths, to 2 %.
The new perspectives for spring point to the Spanish economy as the one with the highest growth in the Euro zone by 2023, with a rate that practically doubles the average for the euro zone (0.8%) or those assigned to France (0.7%) or Italy (0.7%). Much worse stop comes out Germanyfor whom the IMF now forecasts a recession of -0.1% in 2023 as a whole. The new growth forecast of 1.5% for the Spanish economy in 2023 is in line with those projected by the Bank of Spain or the Airef, although they do not reach the greater optimism of the Government, which foresees an increase of 2.1% of GDP for this year.
In its report, the IMF predicts that average inflation will drop in Spain from 8.3% in 2022 to 4.3% in 2023, before settling at 3.2% in 2024. According to the path described, the unemployment rate it would hardly be cut, from 12.9% of the active population in 2022 to 12.6% and 12.4% in each of the following two years.
The IMF warns that most of the world economy will face a more difficult year in 2023 than it was in 2022 due to the simultaneous slowdown in the United States, the European Union (EU) and China, the three largest world economies, so a third of the world economy will be in recession. To all these factors, which were already perceived in January, is now added the financial storm unleashed in March, after the bankruptcy of Silicon Valley Bank, in the US.
The financial threat
The body that runs Kristalina Georgieva warns that, with the recent turbulence unleashed in the banking sector and the collapse of the giant Credit Suisse, “the fog around the global economic outlook has thickened”, so that the positive signals that were illuminated at the beginning of 2023 have off “in the middle of a inflation stubbornly high and the recent turmoil in the financial sector”. In its new global outlook report, the IMF translates this climate of financial uncertainty into a slight downward revision of the already anemic global growth forecast for this year (from 2.9% in January to 2.8%) but warns that if the financial stress, which now seems to be under control, gets out of hand, the cut will be somewhat higher, dragged down by developed economies.
“Risks to the outlook are heavily skewed to the downside and chances of a crash landing have increased considerably & rdquor ;, warns the IMF. Among the risks, he cites the possible worsening of tensions in the financial sector and its contagion, a further deterioration in financial conditions, sovereign debt problems, a worsening of the war in Ukraine, new increases in food and energy or the persistence of the Underlying inflation.
anemic prospects
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For now, the baseline forecast for the world economy, which assumes that the recent financial tensions are contained, is that world growth falls from 3.4% in 2022 to 2.8% in 2023 (one tenth below what was forecast in January), before increasing slowly and be placed at 3% in 2024, until completing the five-year period. “This is the lowest medium-term forecast in decades,” says the IMF to underline the magnitude of the global economic weakness. In addition, it warns that in a “plausible” scenario with greater financial stress, world growth would be cut to 2025 in 2023 (the weakest growth since the world recession) and to 1% for advanced economies. “The anemic prospects reflect the strict policies necessary to reduce the inflation [subida de tipos de interés]the consequences of the recent deterioration in financial conditions, the ongoing war in Ukraine and the increasing geo-economic fragmentation,” the report lists.
The report assumes that “it is unlikely that inflation return to targets by 2025 in most cases,” but presumes that “once inflation rates return to targets, structural factors are likely to allow interest rates to be brought back to their pre-pandemic levels& rdquor ;. But that will be later. For now, the IMF recommends firmness -“The central banks they must stand firm with their toughest anti-inflation stance”-, albeit with a waist, to “be prepared to adjust and use their full suite of policy instruments – including to address financial stability concerns – as events dictate& rdquor ;.