IMF on Spain: Recovery has gained traction, lagged by unemployment

“Spain has rebounded strongly and employment is increasing, helped by past reforms. However, the level of unemployment is still painfully high and vulnerabilities remain. Sustaining job-rich growth at the current pace, further reducing public and private indebtedness, and maintaining confidence will require additional fiscal efforts and structural reforms,” the IMF concluded in its 2015 Article IV Mission.

Madrid has benefited strongly from cheap oil prices and the European Central Bank’s quantitative easing, which have contributed to lowering government borrowing costs and improving  financial conditions.

The IMF points out that “continued fiscal consolidation has reassured markets and further boosted confidence. These collective efforts of Spanish society are the foundation upon which the recovery has been constructed.” And yet structural weaknesses such as a 23.8% unemployment rate need to be addressed in the medium term (for example, the reduction of private debt.)

This  is not the first time the IMF has praised the reforms undertaken by Madrid in the wake of the economic crisis, after years of tough assessments.