Spain may lower growth forecasts: government

24th April 2009, Comments 0 comments

Spain may revise downwards its economic growth forecast for 2009 following statements issued by IMF.

MADRID – Spain may revise downwards its economic growth forecast for this year in line with predictions of the International Monetary Fund, Finance Minister Elena Salgado said Thursday.

"Probably we will do the same thing" as the IMF and that of several Western countries, which have recently revised downwards their predictions, she told a news conference.

The revision may be done in the publication by the government, in June and July, of its new economic objectives for the country, she said.

The IMF on Wednesday said Spain will see full two years of recession, with the economy contracting 3.0 percent this year and 0.6 percent in 2010 and unemployment hitting 19.3 percent next year.

Salgado said the government had a "margin for fiscal manoeuvre" to increase its efforts to stimulate the recovery.

But with a fast-growing budget deficit, the government must "be selective" and "extremely careful," she said.

In its most recent prediction, issued in January, the government projected a budget deficit equivalent to 5.8 percent of GDP in 2009.

It forecast the economy would contract by 1.6 percent this year, after growth of 1.2 percent in 2007, and unemployment would hit 15.9 percent.

The Spanish economy entered its first recession in 15 years at the end of 2008 as the global financial crisis accelerated a downturn that was already underway in its once-buoyant property sector.

AFP / Expatica

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