Economy of Spain
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| Economy of Spain | |
| Currency | 1 Euro = 100 eurocent |
|---|---|
| Fiscal year | Calendar year |
| Trade organizations | EU, WTO and OECD |
| Statistics | |
| GDP (PPP) | 1.362 trillion (2007 est.) (13th) |
| GDP growth | 2.4% (2008 est.) |
| GDP per capita | $33,700 (2007 est.) |
| GDP by sector | agriculture (3.8%), industry (29.4%), services (66.8%) (2007 est.) |
| Inflation (CPI) | 4.3% (Jan. 2008) |
| Population below poverty line |
19.8% (2005) |
| Gini index | 32% (2005) |
| Labour force | 22.01 million (2007 est.) |
| Labour force by occupation |
services (64.6%), manufacturing, mining and construction (30.1%), agriculture (5.3%) (2005 est.) |
| Unemployment | 8.6% (Dec. 2007) |
| Main industries | Tourism, textiles and apparel (including footwear), food and beverages, metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools. |
| External | |
| Exports | $248.3 billion F.O.B. (2007 est.) |
| Export goods | Machinery, motor vehicles, foodstuffs, other consumer goods |
| Main export partners | France 18.8%, Germany 11%, Portugal 9%, Italy 8.6%, UK 8% U.S. 4.4% (2006) |
| Imports | $289.8 billion (2006 est.) |
| Import goods | Machinery and equipment, fuels, chemicals, semifinished goods, foodstuffs, consumer goods (1997) |
| Main import partners | Germany 14.8%, France 13.4% Italy 8.3%, UK 5.2%, Netherlands 4.9%, China 4.6% (2006) |
| Public finances | |
| Public debt | $970.7 billion (2005) |
| Revenues | $440.9 billion (2005) |
| Expenses | $448.4 billion (2005) |
| Economic aid | $1.33 billion (donor) (1999) |
| Main data source: CIA World Factbook All values, unless otherwise stated, are in US dollars |
|
Contents |
[edit] Transition to a modern economy
What is now the 8th largest economy[1] in the world has evolved from the regulated economy of Francoism as the latter started to fade out in 1975.
Francoism initiated in the '60s a set of deregulating moves away from its initial total control of the economy; these, along with large infrastructure projects and a gradual opening to tourism, resulted in the paramount economic growth almost overnight which came to be known as the "Spanish Miracle".
However, by Franco's death and the dawn of the constitutional monarchy, interventionism was still widespread: basic products like bread and sugar had their prices fixed by the government, large public firms controlled all sectors regarded as strategic (Telephone, tobacco, petrol, etc.), shops had fixed opening and closing times (although this too existed, in other European countries, eg. Germany), both passive and active interest rates were fixed by the government, etc. All these rigidities and more were made obvious by the 1973 oil crisis, which terminated the previous expansion cycle and unleashed a roughly 10 years period of severe industrial crisis (1975-1985). This blow stressed the need to modernize the economy and join the European Community.
Spain's accesson to the European Community, now European Union (EU), in January 1986 ushered the country into opening its economy, modernize its industrial base and revise economic legislation. The EU, with amounts of funds from the European Regional Development Fund- Spain greatly improved infrastructures, increased GDP growth, reduced the public debt to GDP ratio, reduced unemployment from 23% to 10%, and reduced inflation to under 3%.
[edit] 1992 crisis and end of the century economic boom
Following peak growth years in the late 1980s, in 1992 the Spanish economy was finally touched by the late 1980s recession; that happened, tellingly, on the year when the Barcelona Olympics were held and all the construction investment and feasts were finished. The economy, however, recovered during the first Aznar administration (1996-2000), driven by a return of consumer confidence and increased private consumption. Unemployment is at 7.6% (October 2006), which represents a significant improvement from the 80's levels and a better rate than the one of Germany or France. Devaluations of the peseta during the 1990s made Spanish exports more competitive.
In 1999 Spain was amongst the leading group within the EU to adopt the Euro as their accounting money in preparation for its launching as a physical currency, which happened in January 1, 2002. On that date Spain terminated its historic peseta currency and replaced it with the euro, which has become its national currency shared with 15 other countries from the Eurozone. This culminated a fast process of economic modernization even though the strength of the euro since its adoption has raised recent concerns that Spanish exports outside the European Union are being priced out of the range of foreign buyers. However, this has been offset by the facilitation of trade among the euro nations.
The Spanish economy is credited for having avoided the virtual zero growth rate of some of its largest partners in the EU (namely France, Germany and Italy) in the late 90's and in the beginning of the 21st century in a process which started with former Prime Minister Aznar's liberalization and deregulation reforms aiming to reduce the State's role in the market place. In 1995 Spain started an impressive economic cycle -which keeps going as of 2008- marked by an outstanding economic growth, with figures around 3%, often well over this rate[2].
This has narrowed steadily the economic gap between Spain and its leading partners in the EU over this period. Hence, the Spanish economy has been regarded lately as one of the most dynamic within the EU (the ninth economy of the world and the fifth of EU), even able to replace the leading role of much larger economies like the ones of France and Germany, thus subsequently attracting significant amounts of native and foreign investment.[3]
Due to its own economic development and the recent EU enlargements up to 27 members (2007), Spain as a whole exceeded (105%) the average of the EU GDP in 2006 placing it ahead of Italy (103% for 2006). As for the extremes within Spain, three regions in 2005 were included in the leading EU group exceeding 125% of the GDP average level (Madrid, Navarre and the Basque Autonomous Community) and one was in the 85% level (Extremadura).[4] According to the growth rates after 2006 to date, noticeable progress from these figures is still going on as of early 2008.
[edit] Current events: a downward scenario
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Starting with the second term of prime minister Jose Luis Rodriguez Zapatero, Spain is facing fundamental economic problems. For the Financial Times these are, namely, Spain's huge trade deficit (one of the largest in the world in relative terms), the "loss of competitiveness against its main trading partners" and, also, as a part of the latter, an inflation rate which is traditionally higher than the one of its European partners, lately affected by house price increases of 150% from 1998 and a growing family indebtedness (115%) chiefly related to this Real Estate boom[5].
The world liquidity crisis stemming from the American subprime mortgage crisis which became worldwide by the second half of 2007 is affecting the Spanish among other Western economies. Its effects have become chiefly apparent with the burst of the Spanish property bubble. The rate of new residential construction virtually halved in less than a year, virtually coming to a halt in some areas. On the other side, due to the lack of own resources, Spain has to import all of its oil and gas, which in the current scenario of record prices is adding much pressure to the inflation rate.
During the first quarter of 2008 the Spanish economy rate grew less than that of the third quarter of 1995, which marked the last quarter of the 1992-1993 recession. By that time, the Spanish economy had five quarters in a row with a negative growth. Also, during the first quarter of 2008 the Spanish economy grew less than other EU major economies (namely Germany) for the first time in a decade. The outcome of this slower pace is that of effective reduced convergence with the European bigger economies, in contrast with the gains in convergence of the last decade.
The Spanish government official growth forecast for 2008 is 2.7%, which seems unlikely to be reached if the current rates are maintained or worsened during the remainder of the year[6].
On the sunnier side, the Spanish banking system has been credited as one of more solid and best equipped among all Western economies to cope with the worldwide liquidity crisis, due to the Spanish own banking rules and practices[7].
[edit] Statistics
GDP: purchasing power parity - $1.358 trillion (2007)
GDP - real growth rate: 3.8% (2007)
GDP - per capita: purchasing power parity - $33,221 (2007)
GDP - composition by sector:
industry: 30.1%
services: 66.5% (2003 est.) One of the main services served is tourism; Spain is the second country in the world in the ranking of both tourist arrivals and incomes from tourism, having received in 2006 alone 58.5 million tourists and 51.1 billion dollars respectively[8]
agriculture: 3.4%
Population below poverty line: 19.8% (2005 est.)[9]
Household income or consumption by percentage share:
lowest 10%: 2.8%
highest 10%: 25.2% (1990)
Inflation rate (consumer prices): 4.3% (2007, end-of-period)
Labor force: 18.5 million (2006)
Labor force - by occupation: services 64%, manufacturing, mining, and construction 29%, agriculture 7% (2001est.)
Unemployment rate: 8% September 2007
Budget:
revenues: $105 billion
expenditures: $109 billion, including capital expenditures of $12.8 billion (2000 est.)
Industries: metals and metal manufactures, textiles and apparel (including footwear), food and beverages, chemicals, shipbuilding, electronic devices, automobiles, machine tools, tourism.
Industrial production growth rate: 0.6% (2003 est.)
Electricity - production: 222,500 GWh (2001)
Electricity - production by source:
fossil fuel: 50.4%
nuclear: 27.2%
hydro: 18.2%
other: 4.1% (2001)
Electricity - consumption: 210,400 GWh (2001)
Electricity - exports: 4,138 GWh (2001)
Electricity - imports: 7,588 GWh (2001)
Agriculture - products: grain, vegetables, olives, wine grapes, sugar beets, citrus; beef, pork, poultry, dairy products; fish
Exports: $192.5 billion f.o.b. (2006 est.)
Exports - commodities: machinery, motor vehicles; chemicals, electronic devices, foodstuffs, other consumer goods
Exports - partners: France 19%, Germany 11.4%, UK 9.6%, Portugal 9.5%, Italy 9.3%, U.S. 4.6% (2002)
Imports: $289.8 billion f.o.b. (2006 est.)
Imports - commodities: fuels, chemicals, machinery and equipment, semifinished goods; foodstuffs, consumer goods (1997)
Imports - partners: France 17%, Germany 16.5%, Italy 8.6%, UK 6.4%, Netherlands 4.8% (2002)
Debt - external: $90 billion (1993 est.)
Economic aid - donor: ODA, $1.33 billion (1999)
Currency: 1 euro (€) = 100 cents Exchange rates: euros per US dollar - 0.67 (2008), 0.83 (2006), 0.82 (2005), 0.81 (2004), 0.89 (2003), 1.06 (2002), 1.12 (2001), 1.09 (2000), 0.94 (1999)
Fiscal year: calendar year
[edit] References and notes
- ^ https://www.cia.gov/library/publications/the-world-factbook/fields/2195.html World Bank GDP figures]
- ^ OECD figures
- ^ Official report on Spanish recent Macroeconomics, including tables and graphics
- ^ Eurostat 2004 GDP figures
- ^ EUROPE: Boomtime Spain waits for the bubble to burst By: By Leslie Crawford in Madrid, Financial Times, Published: Jun 08, 2006
- ^ La economía crece ya a ritmos de 1995 en términos trimestrales y desbarata las previsiones de Solbes - Cotizalia.com
- ^ Spanish steps | Economist.com
- ^ World Tourism Organization 2007 report
- ^ CIA World Fact Book
[edit] See also
[edit] External links
- Banco de España (Spanish Central Bank); features the latest and in depth statistics
- Statistical Institute of Andalusia
- National Institute of Statistics
- Statistical Institute of Catalonia
- Statistical Institute of Galicia
- OECD's Spain country Web site and OECD Economic Survey of Spain
- Article: Investing in Spain by Nicholas Vardy - September, 2006. A global investor's discussion of Spain's economic boom.
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