Today's devastating report from the International Monetary Fund (IMF), forecasting an 8% drop in Spanish GDP and predicting that unemployment in Spain will reach 20.8% due to coronavirus, has not pleased the Pedro Sánchez executive, which did not waste any time in disputing its conclusions. Spanish government spokesperson and treasury minister Maria Jesús Montero said it was "premature" to estimate the impact that the coronavirus crisis would have on the Spanish economy, saying the report is "very early and preliminary", while emphasizing that "it will take more time to see the depth" of the consequences.
The minister noted that the IMF is predicting "very significant falls", with regard to the forecast 8% GDP drop for 2020, but she stressed that the outlook presented for Spain is "of a similar scale" to that of its European neighbours. "Maybe the only light that comes out of the forecast is the projected growth for next year, at around 4%," Montero said during a press conference after this Tuesday's Spanish cabinet meeting.
The government spokesperson emphasized that "it is a preliminary analysis" complaining that there was "no symmetry" between countries as some had been affected earlier by the coronavirus and thus, according to Montero, "they are not yet comparable".
"The world has changed dramatically in the three months since our last World Economic Outlook update on the global economy," opens the IMF's report. The "grim reality" of the coronavirus pandemic leads the global financial organization to predict that the euro zone's GDP will contract by 7.5% this year, and it estimates that among the four largest economies in this area, Italy will record the largest contractions, reaching 9.1%; followed by Spain, with a fall of 8%; France, with 7.2%; and Germany, with 7.0% - all these being negative figures of a size not seen in Europe since World War II.
In fact, just three months ago, the IMF predicted growth of 1.6% in the Spanish economy for this year and 1.3% for the euro zone as a whole. The Fund also now expects that unemployment in Spain will increase from 14.7% at the end of 2019 to 20.8% later this year.
The agency does acknowledge the "high level of uncertainty" in its estimates - however, the actual scenario could end up being even worse, it says. The IMF notes that its baseline scenario, which anticipates that the pandemic will begin to disappear in the second half of this year, could be incorrect.
The report predicts that the United States' GDP will fall by 5.9% this year, Latin America will contract by 5.2% and the Middle East by 2.8%. However, it expects the emerging economies of Asia to remain in the black - just. China, say the IMF, is likely to achieve 1.2% growth this year, instead of the 6.0% which it predicted earlier this year.