The International Monetary Fund (IMF) has improved its estimate of GDP for 2024 by four tenths, to 1.9%. But it has also warned that national political tension can hinder this progress.
The Fund demands from the Executive a tax reform that affects VAT and environmental taxes and prescribes additional adjustments for pensions. The organization recognizes that the Government has done its homework in terms of fiscal consolidation. However debt remains high and public debt will remain at around 3% and 104% of GDP, respectively, in the absence of additional measures. The IMF seems confident that the resistance shown by the Spanish economy in recent years will continue to bear fruit in 2024. It expects inflation to continue to fall towards the 2% target proposed by the European Central Bank by mid-2025. But it also sees upside risks including a rebound in global energy prices and persistent increases in labor costs due to the wage pressures or a low level of productivity. The warning occurs in a context of maximum parliamentary instability, with an Executive supported by a fragile majority.