The increase in defense spending announced by Spain should not be financed at the expense of increasing the already high level of debt in our country’s economy. This is the recommendation of the International Monetary Fund (IMF), which asks Pedro Sánchez’s government to carry out cuts in other areas or tax increases to meet its commitments in defense matters.
The IMF released on Thursday the preliminary conclusions that the institution’s technical staff has prepared at the end of an official visit (or “mission”) to Spain. This is a preview of the report that it will publish in a few months and in which, in addition to revising its GDP growth forecast upwards to 2.5%, it makes some recommendations to the Spanish administrations.
One of the topics addressed by the IMF technicians during this visit of the process called ‘Article IV’ was Pedro Sánchez’s announcement to increase Spain’s defense spending. In this regard, the Fund has warned that any increase in defense spending that occurs in Spain “should be largely budget-neutral and should not compromise growth-friendly spending, such as public investment.” Romain Duval, head of the IMF mission in Spain, recalled that our country has a “high” level of public debt, and stressed that these measures involve a reprioritization of both public spending and taxes. That is, “through lower spending in other areas or higher taxes.”
