## Spain: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain

_IMF Staff Country Reports, November 21, 2018_

## Source details

**Canonical URL:** [Spain: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain](https://www.imf.org/en/publications/cr/issues/2018/11/21/spain-2018-article-iv-consultation-press-release-staff-report-and-statement-by-the-executive-46381)

## Other formats

- [Markdown version](/en/publications/cr/issues/2018/11/21/spain-2018-article-iv-consultation-press-release-staff-report-and-statement-by-the-executive-46381/index.md)
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## Bibliographic details
- Published: November 21, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484385715.002

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### 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

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## Content in this bundle

- **Country Report**
  - [Country Report (Markdown version)](/-/media/files/publications/cr/2018/cr18330.pdf.md){rel="alternate" type="text/markdown"}
  - [Country Report (PDF)](/-/media/files/publications/cr/2018/cr18330.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2018/11/21/spain-2018-article-iv-consultation-press-release-staff-report-and-statement-by-the-executive-46381_