The IMF presented new forecasts for the major world economies, improving the estimates it had made in June, with one exception: Spain. The neighboring country will suffer a “huge drop” in GDP and is one of the economies most affected by the crisis caused by the covid-19.
Spain’s GDP will drop 12.8% in 2020, according to the predictions of the International Monetary Fund (IMF) revealed in the report “Perspective of the World Economy”.
In this document, the IMF has improved its forecasts for the large developed economies, projecting “A somewhat less severe recession” than the June forecast.
The justification for this change is “the second quarter’s GDP results in the large advanced economies, which were not as negative as had been projected”, as well as “China’s return to growth which was stronger than expected ”and“ the signs of a faster recovery in the third quarter ”, as the IMF itself points out.
“In the industrialized world, only one country does not improve“, Precisely Spain, as attested by the newspaper El Mundo, noting the IMF data that indicate a drop in GDP of 12.8% in 2020, in the neighboring country. This is the most negative number 17 major economies analyzed by the Fund.
Spain expected to end 2021 with a GDP 6% lower than it had in 2019. The figure stands at 7.2%, which constitutes the “most upward revision of the major economies examined”.
“Dough fall of 2020 is so gigantic that the 2021 recovery is not worth it, not even far ”, as El Mundo analyzes.
The fall in Spain’s GDP for this year would be “the equivalent of practically erasing the entire tourism sector at once”, the Spanish newspaper also points out, while El País speaks of “A bleak outlook”.
“Worst student” than Spain only Peru, a middle-income country, which will decline by 13.9%, while Lebanon and Venezuela, countries that already had serious economic and social difficulties, will fall by 25%.
The causes for Spanish “economic disaster” they are the “weakness of the business fabric and dependence on tourism”, El Mundo also notes, pointing out that up to 40% of the employment of Small and Medium Enterprises (SMEs) in catering and accommodation is in danger.
Europe will suffer more and China is the only country to grow
Among the large economies analyzed by the IMF, only the China expected to grow this year, but at a percentage of 1,9%, which is a negative record for the country.
A India that in April, it was expected to grow 1.9% this year, it is expected to fall by 10.3%.
We USA, the fall in GDP will be 4.3%, no Japan de 5,3% e no Canada of 7.1%.
The IMF predicts that Europe will suffer more from the economic crisis caused by the pandemic, with the GDP in the Eurozone remains at 8.3% in 2020, while in 2021, it will be 5.2%.
Italy is expected to have the second worst performance in the Eurozone, with a 10.6% drop in 2020, reaching 5.2% in 2021.
In Portugal, the fall will be 10% in 2020 and 6.5% in 2021.
The GDP of Great Britain and of France will fall 9.8% each year, with the French recovering to 6% in 2021.
A Greece decrease by 9.5%, reducing to 4.1% in 2021, while the Germany will have a decrease of 6% recovering to 4.2% in 2021.
On Ireland, GDP will drop by only 3% in 2020, with the scenario worsening to 4.9% in 2021.
Crisis “difficult, long, uneven and uncertain”
The unemployment figures are also not very encouraging in the Eurozone, with the Greece to lead the crisis squad with 19.9% unemployment in 2020 and 18.3% in 2021.
In Spain, unemployment will rise to 16.8% in 2020, which represents one in six workers, as highlighted by El Mundo. The number will not change in 2021.
In Italy, the unemployment rate will be 11% in 2020 and 11.8% in 2021, while in France it will be 8.9% and 10.2%.
In Portugal, unemployment will rise to 8.1% in 2020 and will reach 7.7% in 2021.
Also according to IMF data, the coronavirus threw 90 million people to the “extreme poverty”.
“This crisis must be seen as an economic depression, the question is how long it will last“, Warns World Bank President David Malpass, speaking to El País.
IMF director Kristalina Georgieva warns that it will be “a long, uneven and uncertain difficult climb” and “Prone to setbacks”.