Selected Issues Papers
IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries.
2025
June 13, 2025
Post-Pandemic Investment in Spain: Assessing the Sluggish Recovery
Description: This paper examines Spain’s investment performance five years after the COVID-19 pandemic. As of 2024, investment had only returned to pre-pandemic levels and remained below historical fundamentals and euro area peers, particularly in transport equipment and other construction. Macroeconomic analysis identifies elevated economic policy uncertainty as a factor holding back investment. Moreover, firm-level data show that investment among small and younger to middle-aged Spanish firms is less responsive to profitability than in comparable firms in larger euro area economies, further suggesting that uncertainty is weighing on investment decisions. For younger and middle-aged firms, high leverage during the pandemic also points to binding financial constraints.
June 13, 2025
Exploring the Determinants of Early Retirement in Spain: Spain
Description: Increased longevity and population aging pose growing fiscal challenges for Spain, which can be mitigated by encouraging greater labor force participation among older workers. Over the past decade, increases in both the minimum and standard pensionable age have led to longer average careers, resulting in significant aggregate employment rate gains. However, a considerable proportion of workers still retire early or exit the labor force several years before reaching retirement age. Therefore, policy action across a broader range of areas is needed to foster further employment growth, by addressing critical issues and constraints to labor force participation among workers aged 55 and above. These include deteriorating health conditions, the need for flexibility in work arrangements, other household-related time commitments—such as caregiving for family members, maintaining in-demand skills, and the financial (dis)incentives embedded in unemployment support programs.
June 13, 2025
Policies to Achieve Spain’s Climate Objectives: Spain
Description: Spain aims to cut greenhouse gas emissions, which implies further 30 percent cut from 2023 levels by 2030, requiring new measures beyond current efforts. Emission intensity varies widely across Spanish firms, offering potential for reductions by incentivizing laggards to match less-polluting peers. Relying mainly on public spending, like subsidies or investments, would be costly and insufficient. Carbon pricing is the most effective, cost-efficient, and fiscally attractive option, especially given Spain's limited fiscal space. The ongoing EU-ETS expansion could be complemented with domestic actions to enhance carbon pricing's role.
June 13, 2025
Spain’s Productivity Gap Vis-à-Vis Europe and the United States: Diagnosis and Remedies
Description: Spain's GDP per capita gap with highest-income euro area economies and the US is mainly due to a productivity shortfall. Spanish tech firms lag in productivity and innovation, partly due to weaker R&D investment. Beyond leading firms, there's a broader lack of dynamism; firms enter small and fail to scale up, resulting in fewer high-growth firms compared to Europe and the US. This scarcity of "gazelles" is linked to limited venture capital, human capital, and regulatory obstacles. Policy remedies include enhancing market integration, improving access to long-term risk capital, and boosting the innovation ecosystem and higher education quality.
June 10, 2025
Domestic Revenue Mobilization in WAEMU: WAEMU
Description: Domestic Revenue Mobilization (DRM) is essential for financing economic and social development and ensuring debt sustainability in WAEMU, particularly in light of rising interest, high security spending, and the prospective reduction in foreign aid. While DRM has generally improved over the past two decades, it remains below the former target and exhibits significant disparities across countries, affected by structural challenges – such as narrow tax bases, limited enforcement capacity, and widespread informality. Strengthening tax policy and revenue administration (by streamlining tax systems, rationalizing exemptions, and improving compliance), supported by enhanced regional oversight and cooperation, is critical to ensuring sustainable revenue mobilization.
June 10, 2025
New Zealand's Productivity Challenge: New Zealand
Description: Weak productivity growth continues to pose a challenge for New Zealand’s long-term economic prospects. Hindered by a remote geography and large agriculture and tourism sectors, slow aggregate productivity growth also reflects costs and incentives for investment and innovation, features of the business environment, and availability of financing options. Young, high growth firms appear to face financing challenges, while competition, innovation, and technological diffusion are low across sectors. The current juncture, with a nascent economic recovery underway, presents an opportunity for a multi-pronged reform agenda to address this productivity challenge.
June 6, 2025
Unleashing the Benefits of Intra-African Trade Integration for the WAEMU: WAEMU
Description: WAEMU members’ trade openness, integration into global value chains (GVCs), and export diversification remain limited. Tariffs, non-tariff measures (NTMs, obstacles to trade that arise mainly from differences in national regulations), and a challenging trade environment (e.g., cumbersome Customs and border processes) hamper WAEMU members’ trade with countries outside of ECOWAS; while NTMs and the challenging trade environment weigh on trade even among WAEMU members and on trade between WAEMU members and other ECOWAS countries. WAEMU members should pursue greater trade integration by helping move AfCFTA discussions forward and implementing agreed steps. They should also advocate with AfCFTA partners for a more ambitious process for removing NTMs. In parallel, they should drive forward trade integration among themselves, including by addressing NTMs and seeking to strengthen the trade environment in a cost-effective manner, e.g., by streamlining Customs and border processes.
June 6, 2025
Food Security in WAEMU: Current Challenges and a Way Forward
Description: Food insecurity in WAEMU has worsened over the last few years—mainly due to conflicts, climate, and affordability issues—with the Sahel zone being in a particularly difficult situation. The security environment is complex, while the region is also highly vulnerable to climate change and dependent on food imports. If left unaddressed, food insecurity could have a lasting adverse impact on economic growth and development. Addressing food insecurity in a durable way requires solidarity, as well as well-targeted and coordinated efforts by national and regional authorities, in collaboration with partners.
June 6, 2025
Model-Driven Macrofinancial Policy Analysis in the WAEMU: WAEMU
Description: This quantitative model for Macrofinancial Policy Analysis for the WAEMU was developed to deepen the Fund’s engagement in macrofinancial surveillance in the region. By analyzing unobserved credit cycle dynamics and risks, and emphasizing macrofinancial linkages, the model helps assess the consistency between real and credit cycles, build alternative scenarios, offers medium-term macroeconomic projections, and support macrofinancial policy analysis.
June 6, 2025
Education in the WAEMU: Current Situation and the Way Forward
Description: This paper makes the case for prioritizing the education sector in the West African Economic and Monetary Union (WAEMU) by taking stock of the outcomes and documenting its macroeconomic relevance. Education outcomes across the WAEMU region remain relatively weak, while empirical estimates indicate that improvements could lead to large income gains. Given a young population and high fertility rate, ramping up the progress in education remains critical, including by exploring options to enhance quality, safeguarding related spending, closing gender gaps, and improving the resilience of the education systems to climate and health shocks. Beyond national efforts, regional coordination and cooperation have a crucial role in achieving better education outcomes.