Spain the European country growing the most, and second amongst the developed markets after the US

IMF outlook

The International Monetary Fund (IMF) revised its growth estimates upwards for the Spanish economy for the next two years. The IMF now forecasts Spain’s GDP will grow 2.8% in 2018, four tenths of a percentage point higher than its January estimate, and 2.2% in 2019 compared with its previous prediction for 2%. So Spain is now the European country which is growing the most, and number two amongst the developed markets, after the US.

In general, these figures are in line with forecasts from other international organisations. The 2018 estimate coincides with Bankinter analysts’ prediction, although not that for 2019 which they consider as conservative. Intermoney’s scenario also is broadly in line. Their main discrepancy is with the 2019 figures, a year in which an advance of 2.4% would be on the cards, “in an environment where the inertia will remain positive and, above all, will still be supported by the ECB’s expansionary monetary policy.”

The IMF also highlighted weak points like the high level of public debt, the brakes on foreign investment and the temporary nature of employment.

The Washington-based organisation maintains its positive outlook for global growth, 3.9% in 2018 and 2019. This represents the biggest growth since 2011, backed by solid momentum, favourable financial conditions and the impact of the US tax reform.

“The latest IMF report has a title which summarises the current situation perfectly: “Good news for now, but trade tensions are a threat,” says Bankinter.

And finally, GDP forecasts for the emerging markets remain unchanged at 4.9% for 2018 and 5.1% for 2019,   in the shadow of an estimated advance of 6.6% for China this year, which may fall “a little short.” That said, there was more interest in the IMF’s reminder about the risks existing on a global level, like the high levels of debt and the difficulties faced by the authorities to generate robust growth. Another concern is over the possibility of there being a faster-than-expected tightening of monetary policy in some developed economies.


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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.