The International Monetary Fund (IMF) defends "temporary increases in Corporate Tax designed to

capture extraordinary profits generated by the pandemic"

of Covid-19.

This is stated in the 'World Economic Outlook' report, which is the institution's most influential study, which includes growth and inflation forecasts for the countries that are part of it (all except Cuba and South Korea). North).

The objective of the measure would be

to maintain fiscal consolidation

after the explosion in public spending derived from Covid-19, and to try to make its effects as minor as possible at a time when the States are going to have to act to

compensate for the macroeconomic effects. of the Russian invasion of Ukraine.

The proposal comes just when several of the partners of the Government of Spain, such as Bildu and ERC, have asked the Executive chaired by Pedro Sánchez to create a special tax for electricity companies and banks.

The IMF's thesis is that, due to the characteristics of the crisis generated by Covid-19, its impact has

varied drastically according to the different sectors

of activity.

Thus, the "structural shift" imposed by the pandemic has benefited, for example, "semiconductors, information technologies, pharmaceuticals and biotechnology, and health equipment and services."

In return, it has hit "high-touch sectors" such as hospitality and entertainment especially hard.

Spanish

power companies and banks

are not among those industries, although the former have received an injection of income from the energy pricing system.

Banks, however, have suffered a clear margin squeeze due to the zero rate policy implemented by the European Central Bank (ECB) to combat the economic impact of Covid-19.

Now, Russia's invasion of Ukraine has created a

new set of problems,

creating a wave of inflation especially in gasoline and energy, two chapters that are especially important for countries and consumers with lower incomes.

In this sense, the Fund recommends that the State intervene in cases in which the markets are not efficient and, also, in cases in which there is a risk that a sector is at risk of suffering a wave of bankruptcies of such a dimension that ends up hitting the economy as a whole.

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  • IMF

  • Coronavirus

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  • covid 19