The IMF warns that the second wave may aggravate the crisis in Spain and fears an increase in poverty

The IMF warns that the second wave may aggravate the crisis in Spain and fears an increase in poverty

The IMF warns that the second wave may aggravate the crisis in Spain and fears an increase in poverty

The second, that of infections that Spain is suffering, endangers the economic rebound and, therefore, threatens to exacerbate the crisis. The Bank of Spain has already warned in its estimates, and the International Monetary Fund (IMF) reaffirms it in its review of the Spanish economy and published this Wednesday. ” In the midst of a second wave of infections, the incipient economic rebound is in danger, ” says the agency, while pointing out that “preserving the health of the population remains a top priority” and that “it is critical to ensure the effectiveness of the new containment measures and the preparation of the health system to be able to face new outbreaks, as well as to acquire and distribute a vaccine when it becomes available. “

In the aforementioned document, the Fund maintains its growth estimate for this year for now. Or rather, of economic collapse: a fall of 12.8%. On the other hand, for next year the figures improve by almost one point, going from forecasting a 6.3% growth to 7.2% “underpinned by the use of the EU Recovery and Resilience Mechanism and its trust-building effects “.

But this best, he insists, could be clouded by “slower progress than expected in vaccines and treatments, a no-deal Brexit, an escalation of trade tensions could further cloud the outlook” and, as has been pointed out , the ” failure to control new outbreaks

The warning also comes at a time marked by the confrontation between the Government and especially the Community of Madrid due to the disparity of criteria regarding how the increase in cases should be faced, and with Spain becoming the protagonist of the second wave in Europe .

Increase in poverty

The document of the body directed by Kristalina Georgieva also makes a clear and worrying warning about the impact that the crisis will have on Spanish society: “Socio-economic disparities, which were already high before Covid-19, are on the way to deepening, and it is poverty likely to increase . “

The IMF, which highlights “the strong support for economic policy measures in response to the crisis”, estimates that “people with precarious employment contracts, many of them young , with low qualifications and employed in the most affected sectors, they have been the ones who have suffered the greatest impact. “

Solvency problems for banks and “adequate merger”

As for the banking sector, the Fund anticipates possible solvency problems given “that the credit capacity of banks could be restricted, their profitability, which is already low, is likely to worsen.” ” Credit risk has deteriorated and doubtful assets are expected to increase , especially in the non-financial business segment,” the report said.

For this reason, the organism's technicians consider that the merger between CaixaBank and Bankia is “an adequate response” to the complex context. “As the recent announcement of the merger between two large Spanish banks seems to indicate, a certain additional consolidation of the banking system is another appropriate response to the profitability challenges,” they pointed out.

Likewise, it recommends that Spanish entities adopt “prudent policies” regarding dividends and “continue” with the reduction of costs and investment in technology, as well as in continuing to dispose of inherited assets, reports Europa Press This, along with mergers and acquisitions, are methods to increase the profitability of banks, thus coinciding with the IMF with the recommendations that the European Central Bank (ECB) has made in recent years.

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