The International Monetary Fund (IMF) trusts that Spain will reduce its deficit below 3% in 2024, complying with the reform of fiscal rules that is currently being negotiated in Brussels, as stated in its Fiscal Monitor report presented this Wednesday. .
This reduction will be influenced by the withdrawal of measures to combat inflation, such as the reduction in energy taxes or VAT on food, which the IMF takes for granted.
The Fund also cuts the gap for this year to 3.9%, six tenths less than previously expected due to the impact of inflation on collections and the withdrawal of certain pandemic aid. State spending would go from the 48.7% planned before to the 47.1% marked now. It would thus compensate for the lower income estimate, which goes from 44.2% of GDP forecast in April to 43.1%.
“We are benefiting from strong economic growth to resume this downward path,” said the First Vice President and Acting Minister of Economic Affairs, Nadia Calviño. The economic manager has highlighted that the Spanish economy shows “remarkable resilience”, with a “very strong” recovery since 2021.
In this way, the Washington institution endorses the fiscal consolidation plan outlined by the Government of Pedro Sánchez. The Executive – which this week reviews its macroeconomic projections in the new Budget Plan – committed in April to Brussels to reduce the deficit to 3.9% of GDP in 2023 and 3% in 2024. It is expected that the week that comes the EU Economy and Finance Ministers reach a first agreement on the review of fiscal rules, which until recently were defined by the sacrosanct 3% deficit.
The doubts do not disappear, in any case. To maintain the deficit in a longer period, additional measures would have to be taken, because the forecast is that from 2025 onwards – the study includes until 2028 – it will remain at 3.4%.
In the debt section, the IMF also eases the outlook for this year and marks a downward path in the years that follow. It will stand at 107.3% of GDP this year, 4.3 points less than in 2022 and 3.2 points less than in its April estimates, and then drop to 104.7% in 2024 and 103. 9% in 2025. With this, the Government would meet the objectives set. However, starting in 2025 it would stop its decline and remain at 103.8%.
Today’s data completes a positive image for Spain in the global environment. In its World Economic Outlook report, presented this Tuesday in Marrakech, the IMF maintained the country as the large developed economy that will grow the most this year and the next, with an expansion of 2.5% and 1.7%, respectively, in amid the impacts of monetary policy, a certain slowdown and inflation.
