IMF Raises Spain's Growth Forecast Amid Trade War Concerns
The International Monetary Fund (IMF) has adjusted its economic growth forecast for Spain in 2025, increasing it by two-tenths to 2.5%. While this adjustment signals positive trends for the Spanish economy, it also comes with cautionary notes regarding the risks posed by the ongoing trade war and the country’s political fragmentation.
According to the latest IMF report released this Thursday, Spain's economy is demonstrating robust performance, primarily driven by strong export services and a favorable labor market. The report outlines that consumption growth is expected to remain strong, buoyed by continuous increases in real wages, alongside a gradual decline in household savings rates, which will help negate the slower rise in employment.
For unemployment rates, the IMF anticipates they will stabilize around 11% over the medium term, in conjunction with a decrease in overall inflation and core inflation to approximately 2% by the year's end. Romain Duval, the IMF's mission chief for Spain, remarked on the significant improvements within the labor market, despite the employment rate remaining lower than desired.
The IMF's perspective is that the Spanish economy will continue to outperform the eurozone average in the short term, but a gradual deceleration is expected as workforce growth and exports begin to normalize. For 2026, the GDP growth prediction is set at 1.8%, with further growth stabilization around 1.7% in subsequent years.
This report surfaces as tensions intensify in a tariff battle involving Donald Trump and various global economies. However, the IMF considers that Spain's exposure to these tariffs is limited—significantly less than that faced by other major European economies. Nevertheless, the organization admits that there will be some impact from these tariffs on Spain's economic landscape.
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