IMF Cuts Spain Growth Forecast; Sees Unemployment Holding at 20%
21 September 2011 @ 14:35
The International Monetary Fund cut its forecast for Spanish growth next year and said unemployment will remain close to 20 percent as the spread of the sovereign- debt crisis undermines the recovery.
Spain’s economy will grow 1.1 percent in 2012 instead of the 1.6 percent forecast in July, the Washington-based lender said in a report today. Unemployment will average 20.7 percent this year and 19.7 percent in 2012, it said.
Spain is struggling to emerge from a three-year slump that has pushed the jobless rate to the highest in the European Union and almost doubled its public-debt burden. Europe’s crisis prompted the European Central Bank to start buying Spanish bonds in August.
The IMF maintained its 2011 growth forecast at 0.8 percent. While Spain’s Socialist government, which faces elections in November, forecasts a 1.3 percent expansion, Finance Minister Elena Salgado said in an interview on Aug. 19 the target was “a bit more difficult than it was a quarter ago.” The government is predicting growth of 2.3 percent in 2012.
Source: Bloomberg
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