The International Monetary Fund’s economic growth forecasts for Spain are expected to be higher than those for the Eurozone until 2030, thanks to positive deficit and debt forecasts.

In its World Economic Outlook report, the IMF predicts that Spain’s GDP growth will triple that of the Eurozone this year, “with an expansion of 2.5 % in 2025, compared to 0.8 % anticipated for the 2020s, and will see this gap narrow over the following years.”

On the other hand, the organization forecasts that by the end of the decade, Spain’s annual growth will be 1.6 %, while for the eurozone, the expansion would be 1.3 % in 2028, 1.2 % in 2029, and 1.1 % in 2030.

Regarding inflation, prices are expected to rise by 2.2 % in 2025 and 1.9 % in 2026, while they would rise by 2.1 % in 2027.

Regarding the unemployment rate in Spain, the IMF forecasts a decrease to 11.1 % in 2025 and 11 % in 2026. In this context, the number of employed persons is expected to continue to rise to 21.9 million in 2025 and exceed 22 million next year.

Issues such as debt and deficit are also addressed in the IMF report. In this regard, forecasts call for a decline to 2.7 % of GDP this year, “and a further decline in 2026, reaching 2.4 %.” In the case of public debt, this indicator will fall to 100.6 % in 2025 and “will continue to decline relative to GDP over the remainder of the IMF’s projection horizon, reaching 99 % of GDP in 2026.”

M.Pino

Source: diariofinanciero

(Reference image source: Arturo Rey on Unsplash)

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The European Central Bank (ECB) decided to cut interest rates this month by 25 basis points, to set the reference rate at 3.25 %.

This is the third adjustment by the European body, announced by the ECB Governing Council at a meeting in Ljubljana (Slovenia). Meanwhile, “the main refinancing operations (MROs) – the weekly injections of money – and the credit facility – the one that lends to banks for one day – stood at 3.4 % and 3.65 %, respectively.”

With this technical adjustment, the ECB seeks to “align short-term interest rates in the money market with the decisions of the Governing Council, as well as to remove excess liquidity from the system so that it does not interfere with the correct transmission of monetary policy.”

The slowdown in inflation in the eurozone, which was already reported in September at 1.7 %, is the result of the decrease in the price of energy, fresh food, alcohol, tobacco, among other items during the month of August.

M.Pino

Source: publico.es

(Reference image source: Dimitri Karastelev in Unsplash)

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Gabriel Yorio, Undersecretary of Finance and Public Credit of the Government of Mexico, assured that Mexico will maintain one of the lowest levels of debt in relation to its Gross Domestic Product (GDP) in Latin America, despite the budget deficit expected for 2024.

During an appearance with deputies, Yorio stated that “the Economic Program 2024 will continue to distinguish Mexico as one of the countries with the lowest levels of debt in relation to GDP, well below the alert thresholds established by rating agencies and international financial organizations. “

These statements come just before the lower house of Congress votes on the 2024 Economic Package Revenue Law, which contains fiscal policy and revenue estimates for the Government of Mexico next year. The deadline for this vote is October 20, while the Senate will do so 11 days later.

Despite criticism from the opposition due to the budget deficit of 5.4 %, the highest in three decades, the Undersecretary of the Treasury defended responsibility in debt management, keeping it at a stable and sustainable level that does not exceed 50 %. of GDP, which is “well below the global alert thresholds.”

The Government of Mexico expects to close the six-year term in 2024 with a sustainable debt level of 48.8 %, which would continue to position the country as one of those with the least debt in relation to GDP in Latin America and compared to its peers.

Yorio argued that, despite the deficit, “the country’s fiscal sustainability in the short and medium term will not be compromised.” Therefore, the need to implement new taxes or increase existing ones is not foreseen, since there is still room to increase tax revenues.

The increase in the deficit is attributed to the need to maintain economic momentum in a context of slowing growth in global economies.

The Finance Commission of the Chamber of Deputies of Mexico plans to discuss and approve the Income Law no later than Thursday, October 19, and then send it to the Senate, where the same process will follow.

Once approved, the 2024 Income Law will be sent again to the Executive Branch for its official publication and entry into force.

K. Tovar

Source: Bancaynegocios

(Referential image source: @GabrielYorio, social network X)

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The negative balance of the trade balance of the eurozone stood at 34.4 billion euros last September, compared to the surplus of 6.7 billion euros in the same month of 2021, according to data on international trade in goods published by this Tuesday Eurostat, the community statistics office.

Specifically, exports of goods to the rest of the world rose 23.6 %, up to 259,600 million euros, while imports expanded 44.5 %, up to 294,000 million. Commercial activity between euro partners experienced an increase of 247.6 billion euros, which is equivalent to a year-on-year increase of 27.3 %.

With respect to the activity registered in the first nine months of the year, the euro area recorded a trade deficit of 266.6 billion euros, compared to the surplus of 129.2 billion in the same period last year. Exports up to September grew 19.2 %, up to 2,120 billion euros, while imports advanced 44.7 %, up to 2,386 billion. Commercial activity between euro partners between January and September was 27.1 % higher, standing at 2.021 trillion.

On its side, the trade balance of the European Union (EU) showed a negative balance of 45,800 million, multiplying by 152 the trade deficit of September 2021.

Exports from the community bloc to the rest of the world in the ninth month of the year grew 24 % year-on-year, to 232,000 million, while imports advanced 48.2 %, to 277,800 million. The commercial activity between them was 383,000 million, 26.1 % more.

Between January and September, the Twenty-seven observed exports of 1.889 billion euros, 18.8 % more, while exports were 2.247 billion, 49.7 % more. The commercial activity between the Member States until September reached 3,131 trillion, 25 % more.

The United States remained the country to which the EU directed the most exports until September, with 375.5 billion euros (+29 %). Behind were the United Kingdom, with 243,600 million (917.7 %) and China, with 170,500 million (+2.8 %). In turn, the Twenty-seven imported goods mainly from China (470.7 billion), the United States (262.3 billion) and the United Kingdom (167.3 billion).

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Source: dpa

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