Spain rejects implementation of IMF's recent austerity propo...| MENAFN.COM

Sunday, 14 August 2022 02:40 GMT

Spain rejects implementation of IMF's recent austerity proposals


(MENAFN) Spanish Prime Minister, Mariano Rajoy, stated that his government will not execute the latest proposals made by the International Monetary Fund (IMF), as they are not obligatory, reported AP. The IMF suggested in its latest report that the Spanish government must further slash salaries of public workers, raise value-added tax (VAT) which is a type of sales tax, and reduce a recently re-introduced deduction on mortgage payments for first-time homebuyers. Rajoy said that he will not implement the IMF's suggestions for the time being, because the country's economy is entering a double-dip recession. However, the IMF document noted that Spain must execute reforms and implement austerity measures to lessen its deficit, which reached 8.9 percent of gross domestic product (GDP), much higher than the 3 percent maximum rate set by the EU. It is worth noting that Spain asked for a USD125 billion bailout loan for its banking sector from its European partners.


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