Job creation kept speeding up; in this regard, May 2017 was the best May to date in terms of social security affiliations since this record was started in 2001 and during that month jobless claims fell to the lowest figure since June 2009. At 17.2% in the second quarter 2017, unemployment fell below 4 million for the first time since 2008, with the country experiencing its steepest quarterly decline in unemployment on record to date (series starts in 1964).
Under the structure of shared governmental responsibilities that has evolved since 1975, much responsibility for spending had been given back to the regions.
Exports have shot up, from around 25% (2008) to 33% of GDP (2016) on the back of an internal devaluation (the country's wage bill halved in the 2008-2016 period), a search for new markets and a recent mild recovery of the European economy. == Data == The following table shows the main economic indicators in 1980–2018.
Inflation under 2% is in green. ==Banking system== Spanish private commercial banks played a central role in Spain's economic development, benefiting from their role as the state's creditor in the 19th century, from their ability to monetize public debt, and from state-sanctioned oligopolistic arrangements that lasted from the beginning of the 20th century until the late 1980s, when European rules forced a liberalization of the sector.
The ESM programme for Spain ended with the full repayment of the credit drawn eighteen months later. ==History== When Spain joined the EEC in 1986 its GDP per capita was about 72% of the average of its members.
Unemployment stood at 7.6% in October 2006, a rate that compared favorably to many other European countries, and especially with the early 1990s when it stood at over 20%.
By 2014 the structural unemployment rate was estimated at 18%. After having completed large improvements over the second half of the 1990s and during the 2000s, Spain attained in 2007 its record low unemployment rate, at about 8%, with a few regions on the brink of full employment.
In all, by early 2013 Spain reached an unprecedented unemployment record at about 27%. ==== Youth crisis ==== During the early 1990s, Spain experienced a period of economic crisis as a result of a larger, Europe-wide economic episode that led to a rise in unemployment rates.
During the period October 2007 – October 2008 the unemployment surge exceeded that of past economic crises, including that of 1993.
Then Spain suffered a severe setback from October 2008, when it saw its unemployment rate surge to 1996 levels.
In the past, weak points of Spain's economy included high inflation and large underground economy. The turn to growth during the 1997-2007 period produced a real estate bubble fed by historically low interest rates, massive rates of foreign investment (during that period Spain had become a favorite of other European investment banks) and an immense surge in immigration.
Studies by most independent forecasters estimate that the rate had actually dropped to 0.8% instead, below the strong 3% plus GDP annual growth rates during the 1997–2007 decade.
The growth in the Spanish property market, which had begun in 1997, accelerated and within a few years had developed into a property bubble, financed largely by regional banks, known as "Cajas", which are regional savings banks under the oversight of regional governments, and fed by the historically low interest rates and a massive growth of immigration.
The economic boom of the 2000s was reversed, leaving over a quarter of Spain's workforce unemployed by 2012.
This placed especially great pressure upon lower to middle income groups; by 2005 the median ratio of indebtedness to income had grown to 125%, due primarily to expensive boom time mortgages that now often exceed the value of the property. Noticeable progress continued until early 2008, when the global financial crisis burst Spain's property bubble. A European Commission forecast had predicted Spain would enter the world's late 2000s recession by the end of 2008.
By 2014 the structural unemployment rate was estimated at 18%. After having completed large improvements over the second half of the 1990s and during the 2000s, Spain attained in 2007 its record low unemployment rate, at about 8%, with a few regions on the brink of full employment.
Spain experienced another economic crisis during the 2000s, which also prompted a rise in Spanish citizens emigrating to neighboring countries with more job stability and better economic standings.
In a scenario of record oil prices by the mid 2000s this meant much added pressure to the inflation rate.
Job creation kept speeding up; in this regard, May 2017 was the best May to date in terms of social security affiliations since this record was started in 2001 and during that month jobless claims fell to the lowest figure since June 2009. At 17.2% in the second quarter 2017, unemployment fell below 4 million for the first time since 2008, with the country experiencing its steepest quarterly decline in unemployment on record to date (series starts in 1964).
Home prices soared by 71% between 2003 and 2008, in tandem with the credit explosion. The bubble imploded in 2008, causing the collapse of Spain's large property related and construction sectors, causing mass layoffs, and a collapsing domestic demand for goods and services.
By 2017, Spain's GDP per capita had fallen back to 95% of the European Union's average. === Economic and financial crisis === Spain had continued on the path of economic growth when the ruling party changed in 2004, maintaining robust GDP growth during the first term of prime minister José Luis Rodríguez Zapatero, even though some problems in the Spanish economy were becoming evident.
On the one hand, agricultural funds from the Common Agricultural Policy of the European Union (CAP) are now spread across more countries. On the other hand, with 2004's and 2007's enlargement of the European Union, less developed countries joined the EU, lowering the average income per capita (or GDP per capita), so that Spanish regions which were considered to be relatively less developed, became in the European average or even above it.
In 2013 it became the first country ever in the world to have wind power as its main source of energy. The boom was shaped during the 2004-2014 period, when Spain's agribusiness exports grew by 95% led by pork, wine and olive oil.
This placed especially great pressure upon lower to middle income groups; by 2005 the median ratio of indebtedness to income had grown to 125%, due primarily to expensive boom time mortgages that now often exceed the value of the property. Noticeable progress continued until early 2008, when the global financial crisis burst Spain's property bubble. A European Commission forecast had predicted Spain would enter the world's late 2000s recession by the end of 2008.
Fueling this trend, the Spanish economy was being credited for having avoided the virtual zero growth rate of some of its largest partners in the EU in the months previous to the global Great Recession. Spain's economy had created more than half of all the new jobs in the European Union over the five years ending 2005.
Unemployment stood at 7.6% in October 2006, a rate that compared favorably to many other European countries, and especially with the early 1990s when it stood at over 20%.
With 83.7 million visitors, the country broke in 2019 its own tourism record for the tenth year in a row. The size of the business has gone from approximately €40 billion in 2006 to about €77 billion in 2016.
According to The Economist, Spain has the world's 10th highest quality of life. Following the financial crisis of 2007–2008, the Spanish economy plunged into recession, entering a cycle of negative macroeconomic performance.
By then, the country managed to reverse the record trade deficit which had built up during the boom years, The surplus kept strengthening during 2014 and 2015. In 2015, the Spanish GDP grew by 3.2%, a rate not seen since 2007, the last year before the world financial crisis struck.
At its peak in 2007, construction had expanded to 15% of the total gross domestic product (GDP) of the country and 12% of total employment.
Out of 50 provinces and compared to May 2007, the National Statistics Institute has recorded higher rent levels in 48 provinces, with the 10 most populated accumulating rent inflation between 5% and 15% since 2007.
By 2014 the structural unemployment rate was estimated at 18%. After having completed large improvements over the second half of the 1990s and during the 2000s, Spain attained in 2007 its record low unemployment rate, at about 8%, with a few regions on the brink of full employment.
During the period October 2007 – October 2008 the unemployment surge exceeded that of past economic crises, including that of 1993.
On the one hand, agricultural funds from the Common Agricultural Policy of the European Union (CAP) are now spread across more countries. On the other hand, with 2004's and 2007's enlargement of the European Union, less developed countries joined the EU, lowering the average income per capita (or GDP per capita), so that Spanish regions which were considered to be relatively less developed, became in the European average or even above it.
Compared to the EU's and US's average, the Spanish economy entered recession later (the economy was still growing by 2008), but it stayed there longer.
This placed especially great pressure upon lower to middle income groups; by 2005 the median ratio of indebtedness to income had grown to 125%, due primarily to expensive boom time mortgages that now often exceed the value of the property. Noticeable progress continued until early 2008, when the global financial crisis burst Spain's property bubble. A European Commission forecast had predicted Spain would enter the world's late 2000s recession by the end of 2008.
The European Commission has demanded 3.9% for 2016 and 2.5% for 2017. The Spanish government official GDP growth forecast for 2008 in April was 2.3%.
Home prices soared by 71% between 2003 and 2008, in tandem with the credit explosion. The bubble imploded in 2008, causing the collapse of Spain's large property related and construction sectors, causing mass layoffs, and a collapsing domestic demand for goods and services.
Then Spain suffered a severe setback from October 2008, when it saw its unemployment rate surge to 1996 levels.
During the period October 2007 – October 2008 the unemployment surge exceeded that of past economic crises, including that of 1993.
In particular, during the month of October 2008, Spain suffered its worst unemployment rise ever recorded. By July 2009, it had shed 1.2 million jobs in one year.
By the second quarter of 2014, the Spanish economy had reversed its negative trend and started creating jobs for the first time since 2008.
Job creation kept speeding up; in this regard, May 2017 was the best May to date in terms of social security affiliations since this record was started in 2001 and during that month jobless claims fell to the lowest figure since June 2009. At 17.2% in the second quarter 2017, unemployment fell below 4 million for the first time since 2008, with the country experiencing its steepest quarterly decline in unemployment on record to date (series starts in 1964).
In 2018, at 14.6% the unemployment rate did not exceed the 15% threshold for the first time since 2008 when the crisis began. In 2019, Pedro Sánchez's socialist government increased the minimum wage by 22% in an attempt to boost hiring and encourage spending.
Such growth had continued, with the Spanish economy outperforming expectations and growing 3.2 per cent in 2016, almost twice as fast as the Euro zone average. Subsequently, in the second quarter of 2017 Spain recovered all the GDP lost during the economic crisis, exceeding for the first time the output level that had been reached in 2008.
Exports have shot up, from around 25% (2008) to 33% of GDP (2016) on the back of an internal devaluation (the country's wage bill halved in the 2008-2016 period), a search for new markets and a recent mild recovery of the European economy. == Data == The following table shows the main economic indicators in 1980–2018.
Besides, until the 2008 crisis, Spain's recent performance had shown an inflationary tendency and an inflationary gap compared to other EMU countries, affecting the country's overall productivity.
In June 2008 the inflation rate reached a 13-year high at 5.00%. Then, with the dramatic decrease of oil prices that took place in the second half of 2008 plus the manifest bursting of the real estate bubble, concerns quickly shifted over to the risk of deflation, as Spain recorded in January 2009 its lowest inflation rate in 40 years, followed shortly afterwards, in March 2009 by a negative inflation rate for the first time since the gathering of these statistics started.
the crisis that began in 2008 and the fall of the domestic market, Spain (since 2010) it has turned outwards widely increasing the export supply and export amounts.
By 2008 the automobile industry was the 2nd most exported industry while in 2015 about 80% of the total production was for export. German companies poured €4.8 billion into Spain in 2015, making the country the second-largest destination for German foreign direct investment behind only the U.S.
The lion's share of that investment —€4 billion— went to the country's auto industry. ===Energy=== In 2008, Spanish electricity consumption was an average of 6,523 kWh/person.
In aggregated terms, the Spanish GDP contracted by almost 9% during the 2009–2013 period.
In just two years (2014–2015), the Spanish economy recovered 85% of the GDP lost during the 2009–2013 recession which got some international analysts to refer to Spain's current recovery as "the showcase for structural reform efforts".
Spain's government forecast the unemployment rate would rise to 16% in 2009.
In particular, during the month of October 2008, Spain suffered its worst unemployment rise ever recorded. By July 2009, it had shed 1.2 million jobs in one year.
Since 2009 thousands of established immigrants began to leave, although some did maintain residency in Spain due to poor conditions in their country of origin.
Job creation kept speeding up; in this regard, May 2017 was the best May to date in terms of social security affiliations since this record was started in 2001 and during that month jobless claims fell to the lowest figure since June 2009. At 17.2% in the second quarter 2017, unemployment fell below 4 million for the first time since 2008, with the country experiencing its steepest quarterly decline in unemployment on record to date (series starts in 1964).
In just two years (2014–2015) the Spanish economy had recovered 85% of the GDP lost during the 2009-2013 recession, which got some international analysts to refer to Spain's current recovery as "the showcase for structural reform efforts". By Q2 2016 the Spanish economy had been accumulating 12 consecutive quarters of growth, managing to consistently outperform the rest of the Euro area.
In June 2009 the Spanish government set its banking bailout and reconstruction fund, the Fondo de reestructuración ordenada bancaria (FROB), known in English as Fund for Orderly Bank Restructuring.
In June 2008 the inflation rate reached a 13-year high at 5.00%. Then, with the dramatic decrease of oil prices that took place in the second half of 2008 plus the manifest bursting of the real estate bubble, concerns quickly shifted over to the risk of deflation, as Spain recorded in January 2009 its lowest inflation rate in 40 years, followed shortly afterwards, in March 2009 by a negative inflation rate for the first time since the gathering of these statistics started.
Subsequently, apart from temporary minor oil shocks, the Spanish economy has generally oscillated between slightly negative to near-zero inflation rates during the 2009−early 2016 period.
A global investor's discussion of Spain's economic boom. The Pain in Spain: On May Day, Nearly 1 in 5 are Jobless by Andrés Cala, The Christian Science Monitor, 1 May 2009 Alternatives to Fiscal Austerity in Spain from the Center for Economic and Policy Research, July 2010 Starting a Business in Spain Steps to Starting a Limited Company in Spain The Catalan economy in the European context Spain Spain Spain Spain Economies of Europe
It has been noted that the Spanish government budget was in surplus in the years immediately before the global financial crisis and that its debt was not considered excessive. At the beginning of 2010, Spain's public debt as a percentage of GDP was still less than those of Britain, France or Germany.
The central government found itself in the difficult position of trying to gain support for unpopular spending cuts from the recalcitrant regional governments. On 23 May 2010, the government announced further austerity measures, consolidating the ambitious plans announced in January. As of September 2011, Spanish banks hold a record high of €142 billion of Spanish national bonds.
On 22 May 2010, the Banco de España took over "CajaSur", as part of a national program to put the country's smaller banks on a firm financial basis.
the crisis that began in 2008 and the fall of the domestic market, Spain (since 2010) it has turned outwards widely increasing the export supply and export amounts.
A global investor's discussion of Spain's economic boom. The Pain in Spain: On May Day, Nearly 1 in 5 are Jobless by Andrés Cala, The Christian Science Monitor, 1 May 2009 Alternatives to Fiscal Austerity in Spain from the Center for Economic and Policy Research, July 2010 Starting a Business in Spain Steps to Starting a Limited Company in Spain The Catalan economy in the European context Spain Spain Spain Spain Economies of Europe
According to calculations by the German newspaper Die Welt, Spain's economy had been on course to overtake countries like Germany in per capita income by 2011.
The central government found itself in the difficult position of trying to gain support for unpopular spending cuts from the recalcitrant regional governments. On 23 May 2010, the government announced further austerity measures, consolidating the ambitious plans announced in January. As of September 2011, Spanish banks hold a record high of €142 billion of Spanish national bonds.
December 2011 bond auctions are "very likely to be covered" according to JPMorgan Chase. Till Q2 2012, Spanish banks were allowed to report real estate related assets in higher non-market price by regulators.
In December 2011, the Spanish central bank, Banco de España (equivalent of the US Federal Reserve), forcibly took over "Caja Mediterraneo", also known as CAM, (a regional savings bank) to prevent its financial collapse. The international accounting firm, PriceWaterhouseCooper, estimated an imbalance between CAM's assets and debts of €3,500 million, not counting the industrial corporation.
The economic boom of the 2000s was reversed, leaving over a quarter of Spain's workforce unemployed by 2012.
In 2012, the Spanish government officially requested a credit from the European Stability Mechanism to restructure its banking sector in the face of a financial crisis.
December 2011 bond auctions are "very likely to be covered" according to JPMorgan Chase. Till Q2 2012, Spanish banks were allowed to report real estate related assets in higher non-market price by regulators.
As a solution, Wölfl has suggested making improvements by matching their skills with businesses. =====Employment recovery===== In May 2012 a radical labor reform made for a more flexible labor market, facilitating layoffs with a view to enhancing corporate's confidence.
The troubled situation reached its peak with the partial nationalization of Bankia in May 2012.
By then it was becoming clear that the mounting real estate losses of the savings banks were undermining confidence in the country's government bonds, thus aggravating a sovereign debt crisis. In early June 2012, Spain requested European funding of €41 billion "to recapitalize Spanish banks that need it".
Six of the ten biggest international construction firms specialising in transport are Spanish, lincluding Ferrovial, Acciona, ACS, OHL and FCC. Spain is equipped with a solid banking system as well, including two global systemically important banks, Banco Santander and BBVA. ===Infrastructure=== In the 2012–13 edition of the Global Competitiveness Report Spain was listed 10th in the world in terms of first-class infrastructure.
The top three global occupy Spanish companies: ACS, Global Vía and Abertis, according to the ranking of companies by number of concessions for roads, railways, airports and ports in construction or operation in October 2012.
The economic situation started improving by 2013–2014.
Spain's unemployment rate fell substantially from 2013 to 2017, although the real unemployment rate is much lower as there is an estimation of millions of people working in the grey market, people who count as unemployed or inactive yet still perform jobs.
In all, by early 2013 Spain reached an unprecedented unemployment record at about 27%. ==== Youth crisis ==== During the early 1990s, Spain experienced a period of economic crisis as a result of a larger, Europe-wide economic episode that led to a rise in unemployment rates.
During the economic downturn, Spain significantly reduced imports, increased exports and kept attracting growing numbers of tourists; as a result, after three decades of running a trade deficit the country attained in 2013 a trade surplus which has strengthened during 2014 and 2015.
Spanish exports grew by 4.2% in 2013, the highest rate in the European Union.
As a result, after three decades of running a trade deficit Spain attained in 2013 a trade surplus.
In 2013 it became the first country ever in the world to have wind power as its main source of energy. The boom was shaped during the 2004-2014 period, when Spain's agribusiness exports grew by 95% led by pork, wine and olive oil.
By 2013 the country became the world's leading producer of wine; and 2015 Spain was the world's biggest wine exporter.
By then, the country managed to reverse the record trade deficit which had built up during the boom years, The surplus kept strengthening during 2014 and 2015. In 2015, the Spanish GDP grew by 3.2%, a rate not seen since 2007, the last year before the world financial crisis struck.
By 2014 the structural unemployment rate was estimated at 18%. After having completed large improvements over the second half of the 1990s and during the 2000s, Spain attained in 2007 its record low unemployment rate, at about 8%, with a few regions on the brink of full employment.
By the second quarter of 2014, the Spanish economy had reversed its negative trend and started creating jobs for the first time since 2008.
Since 2014 Spain has been registering steady annual fall in the official jobless figure.
During the economic downturn, Spain significantly reduced imports, increased exports and kept attracting growing numbers of tourists; as a result, after three decades of running a trade deficit the country attained in 2013 a trade surplus which has strengthened during 2014 and 2015.
By then, the country managed to reverse the record trade deficit which had built up during the boom years, The surplus kept strengthening during 2014 and 2015. In 2015, the Spanish GDP grew by 3.2%, a rate not seen since 2007, the last year before the world financial crisis struck.
Spain has gradually become a net contributor of funds for less developed countries of the Union as opposed to receiving funds. ==== Economic recovery (2014–2020) ==== With a 3.2% increase in 2015, the Spanish GDP growth was the highest among larger EU economies that year.
During the economic downturn, Spain significantly reduced imports, increased exports and kept attracting growing numbers of tourists; as a result, after three decades of running a trade deficit the country attained in 2013 a trade surplus which has strengthened during 2014 and 2015.
A 2015 survey by the World Economic Forum proclaimed the country's tourism industry as the world's most competitive.
In 2015 the total value of foreign and domestic tourism came to nearly 5% of the country's GDP and provided employment for about 2 million people. The headquarters of the World Tourism Organization are located in Madrid. ===Automotive industry=== The automotive industry is one of the largest employers in the country.
In 2015 Spain was the 8th largest automobile producer country in the world and the 2nd largest car manufacturer in Europe after Germany. By 2016, the automotive industry was generating 8.7 percent of Spain's gross domestic product, employing about nine percent of the manufacturing industry.
By 2008 the automobile industry was the 2nd most exported industry while in 2015 about 80% of the total production was for export. German companies poured €4.8 billion into Spain in 2015, making the country the second-largest destination for German foreign direct investment behind only the U.S.
By 2013 the country became the world's leading producer of wine; and 2015 Spain was the world's biggest wine exporter.
Strong GDP growth was registered also in 2016, with the country growing twice as fast as the eurozone average.
For 2016 the deficit objective of the government is around 4%, falling to 2.9% for 2017.
The European Commission has demanded 3.9% for 2016 and 2.5% for 2017. The Spanish government official GDP growth forecast for 2008 in April was 2.3%.
During 2016 unemployment in Spain experienced the steepest fall on record to date.
By Q4 2016 Spanish unemployment had fallen to 18.6%, the lowest rate in seven years.
In just two years (2014–2015) the Spanish economy had recovered 85% of the GDP lost during the 2009-2013 recession, which got some international analysts to refer to Spain's current recovery as "the showcase for structural reform efforts". By Q2 2016 the Spanish economy had been accumulating 12 consecutive quarters of growth, managing to consistently outperform the rest of the Euro area.
Such growth had continued, with the Spanish economy outperforming expectations and growing 3.2 per cent in 2016, almost twice as fast as the Euro zone average. Subsequently, in the second quarter of 2017 Spain recovered all the GDP lost during the economic crisis, exceeding for the first time the output level that had been reached in 2008.
Subsequently, apart from temporary minor oil shocks, the Spanish economy has generally oscillated between slightly negative to near-zero inflation rates during the 2009−early 2016 period.
With 83.7 million visitors, the country broke in 2019 its own tourism record for the tenth year in a row. The size of the business has gone from approximately €40 billion in 2006 to about €77 billion in 2016.
In 2015 Spain was the 8th largest automobile producer country in the world and the 2nd largest car manufacturer in Europe after Germany. By 2016, the automotive industry was generating 8.7 percent of Spain's gross domestic product, employing about nine percent of the manufacturing industry.
In this regard, the Spanish economy is forecast to remain the best-performing major economy in the eurozone also in 2017.
Spain's unemployment rate fell substantially from 2013 to 2017, although the real unemployment rate is much lower as there is an estimation of millions of people working in the grey market, people who count as unemployed or inactive yet still perform jobs.
By 2017, Spain's GDP per capita had fallen back to 95% of the European Union's average. === Economic and financial crisis === Spain had continued on the path of economic growth when the ruling party changed in 2004, maintaining robust GDP growth during the first term of prime minister José Luis Rodríguez Zapatero, even though some problems in the Spanish economy were becoming evident.
For 2016 the deficit objective of the government is around 4%, falling to 2.9% for 2017.
The European Commission has demanded 3.9% for 2016 and 2.5% for 2017. The Spanish government official GDP growth forecast for 2008 in April was 2.3%.
In this regard, home sales are expected to return in 2017 to pre-crisis (2008) level. In all, the Spanish real estate market is experiencing a new boom, this time in the rental sector.
In April 2017 the country recorded its biggest drop in jobless claimants for a single month in the entire historical series to date.
Job creation kept speeding up; in this regard, May 2017 was the best May to date in terms of social security affiliations since this record was started in 2001 and during that month jobless claims fell to the lowest figure since June 2009. At 17.2% in the second quarter 2017, unemployment fell below 4 million for the first time since 2008, with the country experiencing its steepest quarterly decline in unemployment on record to date (series starts in 1964).
Such growth had continued, with the Spanish economy outperforming expectations and growing 3.2 per cent in 2016, almost twice as fast as the Euro zone average. Subsequently, in the second quarter of 2017 Spain recovered all the GDP lost during the economic crisis, exceeding for the first time the output level that had been reached in 2008.
The Spanish economy is forecast to remain the best-performing major economy in the Euro zone also in 2017. One of the main drivers of economic recovery is international trade, in turn sparked by dramatic gains in labor productivity.
The 2017 survey repeated this finding. By 2018 the country was the second most visited country in the world, overtaking the US and not far behind France.
In 2018, at 14.6% the unemployment rate did not exceed the 15% threshold for the first time since 2008 when the crisis began. In 2019, Pedro Sánchez's socialist government increased the minimum wage by 22% in an attempt to boost hiring and encourage spending.
The 2017 survey repeated this finding. By 2018 the country was the second most visited country in the world, overtaking the US and not far behind France.
In 2019, Spain was the fifteenth-largest exporter in the world and the fourteenth-largest importer.
In 2018, at 14.6% the unemployment rate did not exceed the 15% threshold for the first time since 2008 when the crisis began. In 2019, Pedro Sánchez's socialist government increased the minimum wage by 22% in an attempt to boost hiring and encourage spending.
With 83.7 million visitors, the country broke in 2019 its own tourism record for the tenth year in a row. The size of the business has gone from approximately €40 billion in 2006 to about €77 billion in 2016.
All text is taken from Wikipedia. Text is available under the Creative Commons Attribution-ShareAlike License .
Page generated on 2021-08-05