The International Monetary Fund believes Spain faces two years of recession as a result of the economic crisis and austerity measures introduced to cut the budget deficit, Italian news agency Ansa reported Thursday.

Quoting from a draft version of the IMF's World Economic Outlook report due to be released on January 24 to which it has had access, Ansa said the multilateral agency predicts Spain's GDP will contract 1.7 percent this year and 0.3 percent next year. In its September 2011 edition of the report, the IMF cut its forecast for Spain's GDP growth this year to 1.1 percent from 1.6 percent.

The IMF's revised forecasts are in line with those of other experts. Moody's Investors Service does not rule out a contraction in output this year of as much as two percent. The new Popular Party government, which took office at the end of last year, has yet to release its official growth estimates for this year. The secretary of state for public administrations, Antonio Beteta, on Wednesday said it is likely the GDP forecast for this year will be for a contraction of 0.5 percent. However, he said the actual figure will be determined in "consensus with the forecast of the European Union and the IMF."

The IMF is also expected to lower its estimates for global growth this year to 3.3 percent and to 4.0 percent for 2013, 0.7 and 0.5 percentage points lower than its September forecasts. It is also cutting its forecasts for the euro zone for this year to a contraction of 0.5 percent from growth of 1.1 percent previously. It sees output of the single-currency bloc growing 0.8 percent in 2013.