Spain: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain
IMF Staff Country Reports, January 19, 2023
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- Spain: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain
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Bibliographic details
- Published: January 19, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400230622.002
Economic outlook and near-term dynamics
- Economic activity in Spain has remained resilient despite the new headwinds posed by the fallout of Russia’s invasion of Ukraine.
- Strong rebound in tourism and other services have supported growth this year.
- The deterioration of the macroeconomic outlook and the rise in interest rates will likely erode borrowers’ repayment capacity.
Findings on prices and energy
- Surge in energy costs is a principal headwind to the economy.
- Policy assessment: mitigation measures for energy cost increases should shift to more targeted income support to the vulnerable, allowing price signals to incentivize demand and supply adjustments, while containing fiscal costs.
- Relevant subjects listed: Energy prices; Inflation; Prices; headline CPI; December CPI flash estimate.
Financial sector vulnerabilities and recommendations
- Banks need to maintain prudent levels of forward-looking provisions.
- Banks should be encouraged to use capital buffers in case downside risks materialize.
- Relevant subjects listed: money market rate; Monetary policy; National accounts.
Structural reforms, investment, and evaluation
- Spain is making progress on its ambitious reform agenda and the execution of investments under the Recovery, Transformation and Resilience Plan.
- Recommendation: Establishing a system of regular, data-driven, outcome-based evaluation of the reforms’ effectiveness will be important to ensure that they achieve the desired outcomes.
- Relevant subjects listed: Labor; Labor market reforms; Labor markets; Income; International organization.
Content in this bundle
- 1espea2023001 — SPAIN: Selected IMF Staff Report Excerpts