Spain: Staff Report for the 2013 Article IV Consultation—Informational Annex

This 2013 Article IV Consultation highlights that the Spanish economy accumulated large imbalances during the long boom that ended with the global financial crisis. Unemployment soared, the fiscal position deteriorated sharply, and funding conditions tightened for both the public and private sectors. Key imbalances are correcting rapidly. Growth has been negative in the last seven quarters, unemployment has reached high levels, and financing conditions remain tight for small firms. The reform process has accelerated and deepened. Decisive reforms in the labor, financial, and fiscal sectors, in line with past IMF staff recommendations, is helping stabilize the economy.

Abstract

This 2013 Article IV Consultation highlights that the Spanish economy accumulated large imbalances during the long boom that ended with the global financial crisis. Unemployment soared, the fiscal position deteriorated sharply, and funding conditions tightened for both the public and private sectors. Key imbalances are correcting rapidly. Growth has been negative in the last seven quarters, unemployment has reached high levels, and financing conditions remain tight for small firms. The reform process has accelerated and deepened. Decisive reforms in the labor, financial, and fiscal sectors, in line with past IMF staff recommendations, is helping stabilize the economy.

Fund Relations

(As of May 31, 2013)

Membership Status: Joined September 15, 1958.

General Resources Account:

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SDR Department:

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Outstanding Purchases and Loans: None

Latest Financial Arrangements: None

Projected Payments to Fund

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2013 Article IV Consultation: A staff team comprising J. Daniel (Head), K. Fletcher, P. Lopez-Murphy, P. Medas, P. Sodsriwiboon (all EUR), A. Buffa di Perrero, M. Chivakul (SPR), K. Christopherson (LEG), R. Espinoza (RES), R. Romeu (FAD) visited Madrid on June 6–19, 2013 to conduct the 2013 Article IV Consultation discussions. The mission also visited Barcelona, Sevilla, and Valencia. R. Teja (EUR) and A. Gaviria (COM) joined for the concluding meetings. F. Varela and Ms. Navarro from the Spanish Executive Director’s office, joined the discussions. C. Cheptea and S. Chinta supported the mission from Headquarters. The mission met with Economy and Competitiveness Minister De Guindos, Finance and Public Administrations Minister Montoro, Bank of Spain Governor Linde, other senior officials, and financial, industry, academic, parliament, and trade union representatives. The concluding statement was published and the staff report is expected to be published as well. Spain is on a standard 12-month cycle. The last Article IV consultation discussions were concluded on July 22, 2011 (EBM/11/81-1). A Financial Sector Assessment Program (FSAP) Update was conducted in two missions (February 1–21 and April 12–25, 2012). On June 8, 2012, the FSAP discussions were concluded and the documents published.

Exchange Rate Arrangements and Restrictions: Spain’s currency is the euro, which floats freely and independently against other currencies. Spain has accepted the obligations of Article VIII, Sections 2, 3, and 4, and maintains an exchange rate system free of restrictions on payments and transfers for current international transactions, other than restrictions notified to the Fund under Decision No. 144 (52/51).

Statistical Issues

(As of June 27, 2013)

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Table 1.

Common Indicators Required for Surveillance

(As of June 27, 2013)

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Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis a vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC or the Substantive Update for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment, and revisions.