In its report it advocates fostering more inclusive growth with initiatives that promote social objectives
In relation to the labor market, the Monetary Fund highlights the progress made, although it points to the need to move towards greater inclusion
The IMF considers that a higher tax collection would allow the deficit to be cut and finance expenditures aimed at reducing inequalities
The Fund values as appropriate the 1.8% deficit target set by the Government for 2019
October 3, 2018. The International Monetary Fund (IMF) has published the conclusions of the report prepared by its technicians after the visit to Spain, in compliance with Article IV of the IMF.
In the final statement, the Monetary Fund notes that the economy maintains a strong tone in an economic cycle that is reaching maturity, so it is necessary to strengthen its resilience. In this regard, they consider it important to relaunch the structural fiscal adjustment, suspended for three years, and preserve the spirit of labor market reforms. In their report they show that these policies must be accompanied by measures that promote more inclusive growth and promote social objectives.
In relation to the labor market, the IMF points out the need to move towards greater inclusion. The report points out, as one of the challenges to be addressed, the duality of the market, which could be corrected through improvements in training and measures to make indefinite contracts for companies more attractive. The IMF believes that the ongoing efforts to tackle the abuses of temporary contracts contribute to this end.
They also highlight the need to promote measures to stop school dropout and improve vocational training and other active employment policies. The IMF values positively the efforts of the authorities in gender policies that, in his opinion, is beneficial to reduce inequality and increase long-term growth.
In relation to fiscal policy, IMF analysts believe that it is necessary to reconstitute the fiscal cushions that were exhausted during the crisis and that current good economic conditions should be used to reduce the high level of public debt. In this sense, the report shows that a higher tax collection can help not only to cut the deficit but also to finance expenses to protect the most vulnerable.
The IMF believes that the 1.8% estimate announced by the Government for 2019 is crucial and appropriate. In addition, it emphasizes the need to reduce the structural deficit, neglected in recent years. The IMF has slightly lowered growth forecasts for 2018, to 2.7% from 2.8%, due to the drop in exports in the first six months of the year and internal consumption.
In its pension recommendations, the IMF underlines the need to develop a comprehensive package of measures that allows the system to be sustainable.
