SPAIN has become the only European country with improved economic prospects for 2015, according to the International Monetary Fund.
The Washington-based IMF has announced that Spain’s economy will grow by 1.3% in 2014 and by 1.7% in 2015, up from July’s forecasts of 1.2% growth this year and 1.6% growth next year.
This is the fastest predicted growth of any advanced European economy, despite a public debt of nearly 100% of GDP, a 25% unemployment rate and no alternative to construction as an engine of growth.
“Growth in Spain has resumed, supported by external demand as well as higher domestic demand reflecting improved financial conditions and rising confidence,” according to the IMF report.
Spain has been recording gradual gains over the last 12 months, driven first by exports and later by increased consumption, in turn encouraged by job creation.
Elsewhere at the IMF Annual Assembly, things were not looking so positive.
Worldwide, expectations for global growth have fallen to 3.3% for 2014 and 3.8% for 2015, down from 3.4% and 4.0% respectively.
This is the third time this year the IMF has cut its global growth forecasts.
Across the Eurozone, growth forecasts have fallen to 0.8% for 2014 and 1.3% in 2015, down from July’s forecast of 1.1% for this year and 1.5% for next.
“There is a risk that the recovery in the euro area could stall, that demand could weaken further, and that low inflation could turn into deflation,” said Olivier Blanchard, the IMF’s chief economist.
“Should such a scenario play out, it would be the major issue confronting the world economy.”