Spain: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain
IMF Staff Country Reports, November 21, 2018
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- Spain: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain
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Bibliographic details
- Published: November 21, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484385715.002
Executive summary and key findings
- Spain’s economy has continued to grow strongly, reflecting its improved fundamentals.
- The young generation faces daunting economic challenges.
- Several downside risks cloud the medium-term outlook:
- External risks: sudden changes in investors’ global risk appetite, escalating global protectionism, weakening conditions in emerging economies.
- Domestic risks: pressure to reverse reforms, continued procyclical fiscal policy, prolonged uncertainty related to Catalonia.
- These risks could hurt the economy particularly in an environment of high public debt, structural unemployment, and sluggish productivity growth, which is set to slow Spain’s income convergence.
Major risks and vulnerabilities
- External:
- Sudden changes in investors’ global risk appetite.
- Escalating global protectionism.
- Weakening conditions in emerging economies.
- Domestic:
- Pressure to reverse reforms.
- Continued procyclical fiscal policy.
- Prolonged uncertainty related to Catalonia.
- Structural constraints:
- High public debt.
- Structural unemployment.
- Sluggish productivity growth leading to slower income convergence.
Policy implications and priorities
- Maintain and build on improved macroeconomic fundamentals.
- Resist pressures to reverse past reforms.
- Avoid procyclical fiscal policy to reduce vulnerability to shocks.
- Address sources of prolonged uncertainty (including political/regional uncertainty) that could impair growth and investor confidence.
- Tackle structural unemployment and policies that slow productivity growth to support income convergence and opportunities for younger cohorts.
Subject areas and keywords (as stated in the report)
- Subject: Banking, Income, Labor, Labor markets, National accounts, Public debt, Wages
- Keywords: CR, Europe, Global, government debt-to-GDP ratio, IMF staff calculation, IMF staff estimate, Income, ISCR, labor market duality, Labor markets, liability positions vis-à-vis nonresident, money market rate, Wages
Content in this bundle
- Country Report