Spain's Economic Growth Outshines Major Economies in IMF's Latest Forecast
The Spanish economy is projected to grow by 2.9% in 2024, according to the International Monetary Fund (IMF), marking an upward revision from previous forecasts made in April and July. This growth not only positions Spain as the fastest-growing economy among major advanced nations but also indicates that it will outpace the economic performance of the United States, which is expected to grow at 2.8%. Spain's growth will surpass the average for the eurozone by more than threefold, showcasing a robust economic recovery amidst global uncertainties.
Looking further ahead, the IMF has maintained its forecast for Spain’s growth in 2025 at 2.1%, suggesting continued strong performance compared to developed peers, albeit lagging slightly behind the United States and Canada. The report anticipates Spain's GDP will grow by 1.6% in 2029, slightly above the eurozone common currency area’s growth.
On a global scale, the IMF predicts a stable growth rate of 3.2% for both 2024 and 2025, maintaining previous estimates despite significant downward revisions for some low and middle-income countries due to escalating geopolitical conflicts. The IMF’s chief economist, Pierre-Olivier Gourinchas, noted that geopolitical tensions continue to impact the global economy but did not drastically affect overall growth projections.
The report also highlights a consistent outlook for advanced economies, which will see a growth of 1.8% in 2024 and 2025, reflecting only minor adjustments from earlier predictions. In contrast, the eurozone's outlook has been downgraded, with estimates falling to 0.8% for 2024 and 1.2% for 2025.
Interestingly, the United States is expected to outperform its initial forecasts with a growth rate of 2.8% in 2024 and 2.2% in 2025, driven by stronger economic activity than previously anticipated. Emerging economies, while holding steady with a projected growth of 4.2% for both years, have seen diminished expectations for China, which anticipates a slower growth rate of 4.8% in 2024.
In terms of inflation, Spain's average inflation rate is projected to be 2.8% for this year, reduced from 3.4% in the previous year. The inflation rate is expected to drop further to 1.9% in 2025, remaining more intense than the eurozone's overall rate of 2.4%. Spain’s inflation rate next year is forecasted to be one-tenth lower than the euro area, indicating a trend toward stabilization compared to other large European economies. Germany's inflation is expected to be 2.4% in 2024 while decreasing to 2% in 2025, and France will see a price increase of 2.3% next year, which should ease to 1.6% in the subsequent year.
For the United States, the inflation outlook forecasts a rate of 3% by the end of 2024, moderating to 1.9% in 2025, which aligns with the Federal Reserve's target for price stability.
Overall, the IMF's latest World Economic Outlook report paints a hopeful picture for Spain's economic landscape, emphasizing its resilience and strong growth trajectory amidst a backdrop of global economic challenges.
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