Economy The IMF proposes "increases in Corporation Tax" for companies that have "extraordinary profits"
Economy The IMF proposes "increases in Corporation Tax" for companies that have "extraordinary profits"
The International Monetary Fund (IMF) has cut its growth forecasts for the world economy by eight tenths compared to just two and a half months ago.
The main reason is the Russian invasion of Ukraine.
There is also a second element: the omicron variant of Covid-19, which has hit the world's second largest economy, China, particularly hard.
The combined effect of both crises is that the world economy will only grow 3.6% this year and next, according to the 'World Economic Outlook' report, published yesterday in Washington to coincide with the IMF spring meeting.
For Spain, the cut in growth is one percentage point, that is, a little higher than in the world as a whole.
And the forecast is that it will have, by far, the greatest expansion of all the large industrialized economies, with a rise in GDP of 4.8%.
The problem is that that is not enough.
The drop in GDP in 2020 - the first year of Covid - so enormous that with the growth of last year and this one it does not recover.
The result is that the Spanish will be, along with the Japanese, the only citizens of a large developed economy who end 2022 still poorer than in 2019. Growing more than anyone is not enough when it has also fallen more than anyone .
These data arrive when the Government is finishing the calculations of the revision of the macroeconomic table that will accompany the Stability Plan that will be presented to the EU next week, as explained yesterday in Washington by the First Vice President of the Government and Minister of Economy
Nadia Calviño
.
And this macroeconomic picture will reflect a growth forecast similar to that of the Fund, which is also in line with the projections of the Bank of Spain.
That means that the 7% increase in GDP forecast in the General State Budgets is absolutely unattainable.
"All the organizations are updating their growth forecasts in a similar environment of significant downward risks, derived from the impact of the pandemic on some important world economies," Calviño said, referring to China, "and the war in Ukraine, which is especially relevant in the case of European economies".
In other words: if things change, it is likely to be for the worse.
The Spanish Minister of Economy makes her debut at this spring meeting of the Fund as president of the International Monetary and Financial Committee, a group made up of 24 countries that maintain totally opposed positions over the invasion of Ukraine.
Among the members of the Committee is the invading country - Russia -,
Spain has no direct exposure to Ukraine or Russia, which explains why the cut in growth is seven tenths, less than half that of Germany or Italy, and also below the eurozone.
Calviño recalled that "although Spain has less direct exposure to Ukraine, it is clear that we are affected by the war due to energy and its impact on the European economy."
Also, if things change, they are likely to change for the worse.
The vice president also insisted that the IMF forecasts inflation for Spain at 5.3% -- equal to that of the euro zone -- this year and a minimum of 0.8% next year.
Calvino reiterated that "inflation levels in March are unacceptable."
This occurs in a context of global slowdown.
The 3.6% growth for this year and the next is exactly what the world economy grew in the nine years from 2011 to 2019. That is to say: it is a solid expansion, but insufficient after an unprecedented crisis like It has been that of Covid-19.
The risks, moreover, are to the downside.
Inflation may be much higher than the report forecasts.
And if Europe adopts tougher economic sanctions against Russia, including in the energy sector, it will see even greater growth stunting and inflation accelerating, as the Fund's study is based on the assumption that sanctions against the regime of Vladimir Putin will remain at the level they had in March throughout the year, but they will not go any further.
And that is a possibility that every day that passes is more questioned.
All these economic magnitudes reflect one thing: the post-Covid rebound is fading fast.
And, with it, the possibilities for Spain to correct its macroeconomic imbalances.
If the Government wants to maintain the deficit reduction and make the country more competitive once the recovery runs out, it will have to introduce economic reforms and speed up fiscal adjustment, something that, given the Spanish political panorama, seems unlikely to happen. make.
Spain, thus, is once again a country with high inflation, a considerable deficit, and a debt that does not fall when the economy grows and does so every time it slows down.
The US and China do not celebrate either
The rest of the world is also not to fire rockets.
The sum of war and pandemic have a devastating effect on the world economy.
The United States will reach an average inflation of 7.7%, the highest figure since 1981 although, in return, it also has the lowest unemployment rate since the IMF statistical series began in 1980.
US inflation could also be higher.
The report is based on a forecast of an interest rate hike of 1.75 percentage points this year, and another point next year, but the Fund does not rule out a faster rise, although not larger than those 3 points between 2022 and 2023.
The world's second largest economy, China, is also taking a hit.
The policy of the president of that country, Xi Jinping, of seeking to eliminate Covid-19 from that country through massive confinements leads the Fund to cut the growth of the second world economy by a spectacular 1.1%.
Thus, China's GDP will grow by 4.4%, the lowest figure since the IMF statistics record that country.
In general, the omicron variant of Covid-19 hits the countries of the Far East particularly hard.
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