Two contrasting building blocks stand out: one is crafted from lime, the other from sand. The International Monetary Fund has lowered its growth forecast for Spain, trimming the projection by up to 1.5 percentage points while keeping the 2025 target at 2.1%. This is the IMF’s latest update released on Tuesday. In 2023, Spain grew by 2.5 percent, pulling momentum through the final quarter, and the IMF’s new data confirms that 2024 is expected to slow down according to Spain’s National Institute of Statistics (INE).
According to IMF calculations, Spain’s growth this year will run above the euro area average, estimated at 0.9 percent, with a rise to about 1.7 percent in 2025. The same pattern appears when comparing to other major eurozone economies: Germany is forecast at 0.5 percent this year and 1.6 percent in 2025, reflecting downgrades of four tenths in both years; France is seen at around 1 percent and 1.7 percent, with revisions of three and one tenths; and Italy at roughly 0.7 percent and 1.1 percent, with a modest uplift of one tenth in 2025.
The IMF update shows global growth at 3.1 percent for 2024 and 3.2 percent for 2025. The forecast for this year is two tenths higher than the projection made last October. The organization attributes the brighter outlook to stronger resilience than anticipated, citing factors such as fiscal stimulus in the United States and China, plus support from other major emerging and developing economies. The IMF notes that the global economy has shown surprising resilience in the face of the pandemic, the invasion of Ukraine, and ongoing financial tensions.
Below historical average
Even with the upward global revision, 2024–25 projections sit below the long-term average of 3.8 percent observed from 2000 to 2019. The IMF points to high interest rates used to fight inflation, the withdrawal of fiscal support in a high‑debt environment, and slow baseline productivity growth as key drags on activity.
The report highlights that inflation is easing faster than anticipated in most regions. Supply‑side problems are easing and monetary policy remains restrictive. The forecast envisions the overall inflation rate around the world slipping to 5.8 percent in 2024 and to 4.4 percent in 2025, representing a downward adjustment from the prior forecast for 2025.
The IMF projects inflation to decline more quickly in advanced economies, with a pace of about 2.6 percent in 2024, while inflation in emerging markets and developing economies is expected to fall more slowly to around 8.1 percent. In essence, a broad easing of price pressures is expected, but the pace will differ by region.
The conclusion drawn is that the likelihood of a hard landing for the global economy has diminished. Reducing inflation more rapidly could allow monetary conditions to ease further. At the same time, too loose fiscal policy might temporarily boost growth but would require more costly adjustments later and could demand more aggressive structural reforms to sustain productivity gains and enable beneficial cross‑border spillovers.
On the downside, renewed increases in raw material prices driven by geopolitical shocks, such as ongoing maritime disruptions, along with persistent supply shocks and core inflation, could extend the period of restrictive monetary conditions.
Additionally, domestic risks such as real estate stress in China could deepen or spillovers could arise elsewhere. Tax increases and spending cuts can also temper growth. The IMF notes that the immediate challenge is to manage the inflation trajectory as it moves lower, adjust monetary policy to evolving price dynamics, and shift toward a less restrictive stance when warranted.
It also emphasizes the need to ensure that inflation continues to fall while economies receive enough space to absorb budget adjustments. Renewed fiscal consolidation is advised to rebuild budget capacity, fund future shocks, set spending priorities, and curb the rise in public debt.
The IMF advocates focused and orderly structural reforms aimed at boosting productivity, ensuring debt sustainability, and accelerating convergence toward higher income levels. It also calls for stronger multilateral coordination to facilitate debt resolution and avoid financial stress linked to excessive debt, freeing space for necessary investments and reducing climate‑change impacts. The overall message stresses resilience and the importance of smarter policy choices to support growth without sacrificing long‑term stability.
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