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Spain: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain

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  • International Monetary Fund

Abstract

This 2022 Article IV Consultation highlights that economic activity in Spain has remained resilient despite the new headwinds posed by the fallout of Russia’s invasion of Ukraine. Strong rebound in tourism and other services have supported growth this year. Policies to mitigate the surge in energy costs should shift to more targeted income support to the vulnerable, allowing price signals to incentivize demand and supply adjustments, while containing fiscal costs. The deterioration of the macroeconomic outlook and the rise in interest rates will likely erode borrowers’ repayment capacity. Banks need to maintain prudent levels of forward-looking provisions and should be encouraged to use capital buffers in case downside risks materialize. Spain is making progress on its ambitious reform agenda and the execution of investments under the Recovery, Transformation and Resilience Plan. Establishing a system of regular, data-driven, outcome-based evaluation of the reforms’ effectiveness will be important to ensure that they achieve the desired outcomes.

Suggested Citation

  • International Monetary Fund, 2023. "Spain: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Spain," IMF Staff Country Reports 2023/033, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2023/033
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    Keywords

    December CPI flash estimate; vis nonresident; headline CPI; staff report projection; money market rate; Inflation; Energy prices; Labor markets; Labor market reforms; Income; Global; Europe;
    All these keywords.

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