topics
tools
Expatica countries
Index Last Var.(%)
BEL 20 2119.44 0.28
DAX 6339.94 0.38
IBEX 30 6543 0.13
CAC 40 3047.94 0.32
FTSE 100 5351.53 0.03
AEX 292.76 0.23
DJIA 12454.83 -0.60
Nasdaq 2837.53 -0.07
FTSE MIB 13154.8 0.36
TSX Composite 11576.47 0.09
ASX 4081.2 -0.61
Hang seng 18713.41 0.25
Straits Times 2772.75 -0.24
ISEQ 20 500.94 1.55
You are here: Home News German News IMF predicts bigger decline for Spain’s economy

German News

archive
Enlarge font Decrease font Text size


11/12/2008IMF predicts bigger decline for Spain’s economy

Unless comprehensive structural reforms are carried out, Spain’s economy will contact by 1.0 percent and be stagnant for a longer period of time, says the IMF.

MADRID – Spain's economy will shrink by at least 1.0 percent next year instead of the 0.2 percent forecast in October, and risks entering an extended period of stagnation unless sweeping structural reforms are carried out, the IMF said Wednesday.

"The near term prospects are sombre and uncertain," the International Monetary Fund said in a report posted on its web site, adding "the medium-term recovery also crucially depends on progress with implementing comprehensive structural reforms."

"In their absence, Spain could get stuck in a low-competitiveness, slow-growth, extended-deleveraging, and high-unemployment equilibrium, from which returning to lower public debt would be difficult," it said.

Dismissal costs must be lower to boost hiring, collective bargaining agreements need to be more flexible and the practice of indexing wages to inflation must end, the Washington-based Fund said.

Spain's public deficit will exceed 5.0 percent of gross domestic product (GDP) next year as a result of the economic stimulus measures adopted by the socialist government of Prime Minister Jose Luis Rodriguez Zapatero, it said.

At the end of November, Zapatero announced his government would spend an EUR extra 11 billion over two years, mainly on public works to boost the country's flagging economy and cut unemployment.

Spain's once-buoyant economy is on the verge of recession as the global financial crisis has hit the key construction sector, which was already weakened by oversupply and rising interest rates.

The Spanish economy contracted for the first time since 1993 in the third quarter, shrinking 0.2 percent, and most economists expected it will shrink again during the fourth quarter.

The Paris-based Organisation for Economic Co-operation and Development (OECD) predicted at end November that the Spanish economy would contract 0.9 percent next year.

The European Commission, the executive arm of the European Union, predicts Spanish GDP will fall by 0.2 percent next year, weighed down by lower private consumption and an ongoing contraction of housing and equipment investment.

The Spanish economy expanded by 3.7 percent last year.

[AFP / Expatica]


0 reactions to this article

Be the first person to add a comment

General rating: Not rated yet

Rate article:    Add my rating



0 reactions to this article

Be the first person to add a comment
Discussion Forums

Legal Problems in Germany

Visa employment help

Australians in Germany

BUY FAKE PASSPORT, DRIVING LICENSE,ID CARD

Irish in Germany

BUY FAKE PASSPORT, DRIVING LICENSE,ID CARD

Canadian in Germany

BUY FAKE PASSPORT, DRIVING LICENSE,ID CARD

Discuss German Culture

BUY FAKE PASSPORT, DRIVING LICENSE,ID CARD

participate in the forums

Inside Expatica
The ABCs of the German school system

The ABCs of the German school system

What you need to know about German schools and daycare.

German immigration and residency regulations

German immigration and residency regulations

Want to move to Germany but haven’t figured out the details? Check out Expatica’s overview of the German permit system.

Driving in Berlin: Rules, habits and fines

Driving in Berlin: Rules, habits and fines

In part one of our two part series, we cover the driving culture in Berlin, where to park and buy gas and, most importantly, the laws.

Looking for work in Germany: The in depth version

Looking for work in Germany: The in depth version

Our comprehensive guide includes information on how to find work, recruitment agencies, employment contracts and labour law.