IMF estimates Spanish GDP growth 2012-2013

IMF estimates Spanish GDP will shrink 2012 : Spain faces a lost decade of growth, with the current double-dip recession lasting for at least another 18 months, the International Monetary Fund warns. In its latest report on the Spanish economy, just released, the IMF warned that the scale of the Spanish downturn poses a threat to the rest of Europe.

The Fund said the outlook for Spain was “very difficult” and that the fresh austerity measures announced by the government of prime minister Mariano Rajoy would have “a significant impact on growth”.

The IMF now estimates that Spanish GDP will shrink by -1.7% in 2012, and a further -1.2% in 2013. It then sees a 0.9% expansion in 2014.

It also warns that Spain is threatened by several downside risks – including the danger that Rajoy's policies fail to stop capital leaving the country; or the impact of "further stress" elsewhere in the euro area.

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