The UN oversees the stability of the International Monetary Fund. The International Monetary Fund expects Spain’s economy to shrink by 11 percent by 2020 and grow by 5.9 percent again by 2021. In October, the International Monetary Fund forecasts an economic growth of 7.2 percent of GDP. However, the Spanish government is sticking to the forecast that the national economy will grow by 7 percent by 2021.
Economy vulnerable to an epidemic
According to Geeta Gopinath, chief economist at the International Monetary Fund, Spain is lagging behind because the country has a proven economy that is vulnerable to an epidemic situation, so recovery from its effects is low. In European countries where tourism accounts for a significant portion of GDP, the economic impact is greater than in countries such as China and the United States.
Spain leads the tourism sector with 14 percent of GDP. Because of the relatively large share of medium and small enterprises, it is more difficult for Spain to recover from this crisis than countries whose economies are mainly run by large corporations. In addition, the effects of Covit-19 on public health in Spain should not be underestimated: Spain is the second most populous developed country in the world after Belgium, Italy, the United Kingdom and the United States.
The largest economic contraction in Spain
According to the International Monetary Fund, the economic contraction within the eurozone is 11.1 percent in Spain. All other countries are less than 10 percent. On the other hand, the contraction in 2020 will be dramatically lower than the 12.8 percent initially predicted by the International Monetary Fund. Globally there was a 3.5 percent economic contraction. This is the highest percentage in peacetime since the recession of the 1930s.
The vaccine campaign in Europe is slowly advancing
Throughout the eurozone, economic recovery is less pronounced than in countries such as the United Kingdom and the United States, where vaccines are much slower. Even in Spain, the most advanced of all major EU member states with the vaccine campaign, only 2.7 percent of the population has been vaccinated against Covit-19, according to the Bloomberg News Agency. It is 7.1 percent in the United States and 11 percent in the United Kingdom.
In contrast to Europe, the International Monetary Fund has revised expectations for economic growth in Japan, China and the United States. For the United States, President Joe Biden’s $ 1.9 trillion bailout plan presented last week will also have a positive impact on the 2021 outlook.