Spain needs fiscal adjustment: expert

Spain needs a fiscal adjustment and one of the measures is to increase sales tax, a Spanish expert has told Xinhua.

Pedro Videla, professor of economics at the IESE Business School in Barcelona, said he agreed with the recommendations proposed on Tuesday by the International Monetary Fund (IMF) for Spain.

The IMF said Spain should raise indirect taxes, lower public debt and review spending to achieve greater efficiency in a report presented Tuesday.

The IMF advised Spain to raise special taxes, environmental taxes and raise tax sales on some products.

Videla slammed the recently-approved increase of 8 percent of the minimum wage to 707.6 euros (751.88 U.S. dollars).

"It's a regressive policy, against the low-income people," he said. "Taxes will increase for job creators, which will also affect low-income people."

The companies will pass the cost of increasing minimum wage on to consumers, he said.

The IMF insisted on the importance of wage moderation and pointed to high unemployment and weak productivity as some of the main problems.

The IMF said that despite improvements thanks to wage moderation and greater labor flexibility, there were too many temporary jobs, and showed concern for the long-term unemployed and youth unemployment.

In general, the IMF described the recovery of the Spanish economy positively but asked for more reforms. Endit