The IMF improves its growth forecast for Spain to 2.5% due to a boost from tourism

Spanish economy continues to grow at a surprising rate, not only for the organizations that update their forecasts, but also for the Government itself, which in its macroeconomic calculations predicted progress from Gross Domestic Product (GDP) which now challenges itself upwards. The last to do so was none other than International Monetary Fund (IMF)which in its report on the world economic outlook published this Tuesday indicated that GDP will grow by 2.5 percent this year, one point more than what the agency forecast just three months ago and almost half a point more than what the Government predicts (2.1 percent).

The Fund’s experts believe that the fundamental reason for this economic progress is the “greater strength of services and tourism” in Spain. In this summer report, they do not provide many more details about the Spanish economy, but they compare the situation with the rest of the Eurozone and point to strong GDP growth in our country. Within the Eurozone, “growth was revised upwards in Italy [0,4 puntos más] and in Spain, which will advance a point more than expected. The situation is very different from that of other European powers such as Germany, which will enter recession this year (-0.3%) due to “weak manufacturing output and economic contraction in the first quarter”.

Spain will grow at more than twice the rate of the eurozone as a whole, where GDP will grow by 0.9% in 2023 and rise again to 1.5% in 2024. Spain’s GDP growth will also be well above that of France (0.8%) and Italy (1.1%), and if you look outside the EU, it will also be higher than that of Britain (0.4%) or the United States (1.8%).

The government is very positive about the figures published by the IMF on Spain, as it is “one of the biggest upward revisions”. “In 2023 and 2024, Spain will have the highest growth of the main developed economies, with growth this year that will be almost three times higher than the one estimated for the Eurozone,” the Ministry of Economy points out.

Tourism drives the economy

After two very difficult years for the tourism sector, the boom it has experienced since the second half of 2022 and so far in 2023 has allowed it to recover its pre-pandemic numbers and even surpass them. Tourism will end the year with a share of 12.6 percent of the national GDP, which is equal to the data from 2019, according to data from Exceltur. This represents this year’s tourism activity of 178,800 million euros, almost 14 percent more than the income the sector had in 2019.

Experts explain that tourism is still the fundamental leg on which the Spanish economy is based, despite the fact that in the years of the pandemic, some voices advocated the reindustrialization of the country so that when the crisis breaks out, the economy will strengthen and not depend so much on services, but for now it is not the case.