Economic Trends/Outlook in Spain

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Economic Overview

Spain has achieved an economic leap in the last two decades and has risen to be amongst 20 of the world's most significant economies. It registered annual GDP growth rates higher than 4% between 1997 and 2000 and thereafter a growth rate that is always higher than the average in the Euro zone due to consumption and to the real-estate "boom". Nevertheless, the growth factors, which were at the root of its economic growth have been weakened by the financial crisis, which touched the real-estate sector and weakened the banking system. In 2009, the GDP growth fell by 3.7%, putting an end to 16 subsequent years of positive economic growth.

The government’s stimulus policies did not prevent a rise in unemployment, which increased to as high as 18% of the active population, the highest rate in the European Union in 2009. The labour market reform which came into operation in 2010 has nevertheless helped increase the productivity of the Spanish economy. Both the construction sector and to some extent consumption were hit by the economic crisis. Although inflation is showing a tendency towards stabilization, household consumption predictions remain bleak for 2011.

Many companies are in trouble or are closing down, especially in real-estate, construction and public works sectors. Outstanding debts of companies as well as families have increased by 12% in figures but by 61% in value.
In 2010, Spain turned towards a different economic model, freeing itself from real estate as its traditional growth factor and capitalizing on improved competitiveness and a higher added value on services. With an increase of 22.4% on its quarterly net profits, Spain’s number one bank Santander reflects the country’s ambition to resist the economic downturn. 

Main Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 1,467.89 1,409.95e 1,484.71e 1,524.06e 1,563.63e
GDP (Constant Prices, Annual % Change) -3.7 -0.1e 0.8e 1.6e 1.8e
GDP per Capita (USD) 32,030 30,639e 32,176e 32,947e 33,730e
General Government Balance (in % of GDP) -9.0 -7.5e -4.7e -4.6e -4.4e
General Government Gross Debt (in % of GDP) 53.2 60.1e 63.9e 67.1e 69.9e
Inflation Rate (%) -0.2 2.0e 2.6e 1.5e 1.4e
Unemployment Rate (% of the Labor Force) 18.0 20.1e 19.4e 18.2e 17.1e
Current Account (billions USD) -74.14e -75.04e -72.97e -73.60e -
Current Account (in % of GDP) -5.1e -5.3e -5.1e -5.0e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors of Industry

Agriculture contributes around 3% of the Spanish GDP. The country produces wheat, sugar beet, barley, tomatoes, olives, citrus fruits, grapes and cork. It is the world's largest producer of olive oil and the world's third largest producer of wine. It is the largest producer of lemons, oranges and strawberries. Spain has limited mineral resources.

The manufacturing industry is dominated by textiles, industrial food processing, iron and steel, naval machines and engineering. The new sectors such as relocation of the production of electronic components, information technology and telecommunications provide a high growth potential. In 2009, industrial production growth rate nevertheless fell by 10.2%.

Tourism represents Spain's largest source of income, having become the second tourist destination of the world and thereby stimulating export of goods and services. The tertiary sector contributes to 2/3 of the GDP.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.3 27.8 67.9
Value Added (in % of GDP) 2.7 26.2 71.2
Value Added (Annual % Change) 1.0 -10.3 -0.9

Source: World Bank - Last Available Data.

For more detailed background on Industries in Spain, click here.

Indicator of Economic Freedom

Mostly free
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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