The institution speaks of rigidities rooted in the Spanish system. It also criticizes the fiscal situation of the autonomous communities. The Agency calls for greater decentralization of collective bargaining. The International Monetary Fund (IMF) stressed Friday the gradual recovery of the Spanish economy, but pointed out that it is not enough to reduce the unacceptable rate of 21% unemployment, and warned that half of regional Governments does not reach fiscal objectives. We see two concerns: macroeconomic projections may be somewhat optimistic and regions are not complying with fiscal targets, said James Daniel, j of the Mission of the Fund in Spain, in its report of the periodic review of the Spanish economy. The IMF maintained its forecast of growth for Spain in 2011 in 0.8% of the gross Interior product and 1.6 per cent in 2012, against forecasts of Madrid 1.3% and 2.3%, respectively. The Fund noted that the response of the macroeconomic policy of the Spanish authorities to the crisis has been strong and wide-ranging, although he added that it is not enough urged to continue and deepen these reforms.

Fiscal consolidation in Spain has been ambitious, according to the new IMF report, according to which the central Government’s deficit will be at 6% of GDP by the end of the year, so it is still a way to reach the goal of fiscal balance by 2014. We need that all levels of Government do their part in the massive challenge of building that faces Spain, said Daniel on rrencia to the regional governments. The international agency described unemployment as the real problem of the Spanish economy due to entrenched labour market rigidities. More decentralization in this regard, the recommendations of the Fund are greater decentralisation of collective bargaining, which will allow to link wages with the inflation and a lower unemployment compensation. On the positive side, the IMF noted a better behavior than expected exports and highlighted the global reform of the financial system, especially the savings banks. He has been much progress in the banking sector, which is positive, but the prospects are complicated due to the economic situation of the country, added Daniel. It also assessed that the banking sector has increased its capital volume, you recognized large losses and shown transparency to reveal exposure to troubled real estate assets. On the negative front, the Fund stressed that the real estate and construction sector will remain a headwind for the Spanish economy in the near future. In addition, indicated that picked the inflation has been up in recent months, driven by energy prices and indirect taxes, and is again above the European average. Source the news: the IMF says that the “recovery of the Spanish economy is not enough to lower unemployment”