Risks to Spain's economy and financial sector remain elevated as the country undergoes a difficult process of fiscal and external adjustment, the International Monetary Fund reported Monday.
The IMF's statement came after the fund's second quarterly visit between Jan. 25 and Feb. 1 to review the country's financial sector.
Despite its concerns, the IMF praised Spain's progress in bank recapitalization.
"This clean-up is a major achievement that should strengthen confidence in the system and improve its ability to support the real economy," the IMF said.
"Remaining elements of the recapitalization and burden sharing exercise should be completed in a timely manner and in ways that minimize taxpayer costs."
The IMF was also complimentary about Spain's success in establishing a "bad bank" called SAREB.