REFILE-IMF more upbeat on Spain's 2020 GDP slump, cautious on 2021 rebound

(Fixes dateline)

MADRID, Nov 13 (Reuters) - The International Monetary Fund said on Friday that Spain’s economic contraction may be less severe this year than the 12.8% the fund predicted earlier this year thanks to a strong rebound in the third quarter.

The fourth quarter could however still undermine growth projections for 2021, the IMF said in a report.

The Fund also said that banks’ profitability and lending capacity could deteriorate as bad loans would will likely rise “disproportionately” in Spain’s non-financial corporate sector upon the expiration of some borrower support measures. (Reporting by Belen Carreno, Jesus Aguado and Andrei Khalip, editing by Andrei Khalip, Ingrid Melander)