Spain must make wide ranging reforms, weak recovery-IMF

MADRID May 24 (Reuters) - Spain must make far reaching, comprehensive reforms, including to the labour market, while its economic recovery remains fragile, The International Monetary Fund said on Monday. "The challenges are severe: a dysfunctional labor market, the deflating property bubble, a large fiscal deficit, heavy private sector and external indebtedness, anemic productivity growth, weak competitiveness, and a banking sector with pockets of weakness," the IMF said in an annual report on Spain.

The IMF said after a weak recovery the economy would grow by 1.5-2.0 percent in the medium term.

"Our central scenario is one of continued adjustment of the various imbalances with growth rising gradually to 1.5-2 percent in the medium term," the report said.

(Reporting by Paul Day; editing by Axel Bugge)