Baku, October 15, AZERTAC
The International Monetary Fund (IMF) on Tuesday maintained its forecast that Spain will suffer most among developed countries from the economic impact of the coronavirus pandemic, with a 12.8-percent fall in its gross domestic product (GDP) in 2020, Xinhua reports.
The IMF made its prediction in its World Economic Outlook, making no changes to the fall in GDP that the organization had originally predicted in June.
In comparison, the IMF predicted a 10.6-percent contraction for Italy, a 10-percent contraction for Portugal, and a 9.8-percent contraction for both France and Britain.
One of the main reasons for Spain suffering more than any of its neighbors is the importance of the tourist and service sector in the country, with tourism accounting for 11 percent of Spain's GDP and 12 percent of direct employment.
The IMF also expected that the COVID-19 crisis would hit hard Spain's labor market, with an unemployment rate of 16.8 percent for 2020 and 2021.
The IMF was cautiously optimistic about Spain's ability to bounce back from the pandemic and explained that if further outbreaks of the coronavirus are kept at bay, 2021 should see GDP increase of 7.2 percent.
However, the organization warned that controlling the coronavirus is essential if the economy is to reactivate and argued that tough measures such as lockdowns can help in "paving the way for a faster economic recovery if they manage to contain the pandemic and limit social distancing," as short-term damage would be offset by higher medium-term growth.
In its World Economic Outlook, the IMF projected the global economy to contract by 4.4 percent in 2020, 0.8 percentage point above the June forecast. China's economy is likely to grow by 1.9 percent this year, it said.
"This upgrade owes to somewhat less dire outcomes in the second quarter, as well as signs of a stronger recovery in the third quarter, offset partly by downgrades in some emerging and developing economies," said IMF chief economist Gita Gopinath.