Spain is not projected to enter a recession in 2023 and is expected to maintain growth that outpaces the euro area over the coming year. The IMF predicts that the country will not reclaim its pre-pandemic output level until the early months of 2024, reflecting a gradual rebound rather than an abrupt return to previous levels.
Alfred Kammer, the head of the IMF’s European Department, emphasized during a press conference tied to the IMF and World Bank annual meetings that Spain is among the few nations where a technical recession next year is not anticipated. This optimism stands even as several economies are forecast to face outright contractions, underscoring Spain’s relative resilience in the region.
Consequently, while some economies may experience a full-year downturn, Spain is seen as recovering more robustly than many peers. Production and activity are not expected to reach their 2019-2020 peak levels until early 2024, signaling a delayed but persistent recovery trajectory rather than a sharp dip in growth.
In the IMF’s latest global economic outlook, released on the 11th, Spain is noted to perform above earlier expectations, though the overall pace of growth is projected to slow next year as tourism and industrial output stabilize. The IMF cites a 4.3% expansion this year driven by tourism and manufacturing, alongside a more modest pace ahead as economic normalization continues.
The IMF lowered its 2023 growth forecast for Spain to 1.2%, a revision from earlier estimates and closer to the Bank of Spain’s own projection of around 1.4%. This figure remains markedly more pessimistic than the Spanish government’s 2.1% outlook for 2023, highlighting diverging analyses within the country on the pace of expansion.
Petya Koeva, deputy director of the IMF’s Research Department, noted at a press briefing that the positive data for 2023 could improve once the latest country-specific information is incorporated into subsequent updates, suggesting current projections may be revised upward as new data arrive.
Even amid elevated inflation and global uncertainty, Spain posted a 1.5% quarterly growth rate in the second quarter, surpassing expectations by four-tenths of a percentage point according to official statistics. The momentum is supported by resilient domestic demand and ongoing recovery in key sectors amid the broader geopolitical tensions like the Russia-Ukraine conflict.
At the press briefing, Kammer pointed to tightening financial conditions as a factor that could dampen demand and temper growth in the near term. He also highlighted that high inflation continues to affect consumer confidence and household spending, which in turn influences the speed of the recovery across the economy.
Spain, traditionally one of the hardest-hit economies during the pandemic, is nonetheless showing strong political and policy responses that have helped move the economy from recessionary pressures toward renewed expansion. The IMF’s assessment frames Spain as staying ahead of many Eurozone peers, maintaining growth above regional averages despite headwinds and uncertainties.
Looking ahead, the IMF notes that Spain is expected to grow at 3.1% this year, an upgrade from prior forecasts by half a percentage point. However, the outlook for 2023 itself is more muted, with a forecast of about 0.5% growth—a revision downward by roughly seven-tenths from the July projection—as the economy absorbs the impact of external shocks and domestic demand constraints. These dynamics illustrate a landscape of gradual improvement rather than rapid acceleration as the country navigates a still-choppy global recovery.