IMF: Spain - outlook uncertain, unprecedented recession

Market confidence weak; ahead with reforms

15 June, 19:26

(ANSAmed) - NEW YORK, JUNE 15 - Spain faces a "very difficult" outlook. The economy is in the midst of a new recession that is "without precedent, with an unemployment rate already at unacceptable levels, public debt rapidly rising and a financial system in need of recapitalisation".

"Despite its reforms and efforts," in Spain "market confidence remains weak" and has to be revived by continuing along the road of reforms, the IMF continues in its article on Spain, which stresses how Madrid "has urgent need of growth in employment and further gains in terms of competitiveness". Spain needs to do more to reduce its debt and its deficit.

According to the IMF, "despite its considerable efforts, the ambitious target of a 5.3% deficit in 2012 will not be met. "The outlook for Spain will be helped by further progress at a European level. There is an immediate need for the euro area to ensure sufficient funds to its banks and to prevent contagion.

But a lasting solution of the crisis will require persuasive and concerted action in the direction of a stronger monetary union".(ANSAmed).

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