Among the top ten in the world are also the Spanish Sacyr (21,500 million), FCC and Global Vía (with 19,400 million) and OHL (17,870 million). Insurance payments in the agricultural sector, along with flood-related property claims, only reached into the tens of millions EUR. [96] 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. Home | Country Rankings | Graph The Data | Heat MapExplore the Data | Downloads | FAQs| About The Index, Next: #59 Saint Vincent and the Grenadines. Prime Minister Pedro Sánchez’s ruling center-left Spanish Socialist Workers’ Party was forced to form an unstable minority coalition government with the radical left Podemos party. If government spending and related sovereign borrowing were reduced, a liberated private sector could boost growth and employment. As a solution, Wölfl has suggested making improvements by matching their skills with businesses. Between 1985 and 2018 around 23,201 deals have been announced where Spanish companies participated either as the acquirer or the target. Concerns about official corruption often center on campaign financing. [66], As of September 2011, Spanish banks hold a record high of €142 billion of Spanish national bonds. The ESM programme for Spain ended with the full repayment of the credit drawn eighteen months later. Business Freedom 66.8 Create a Graph using this measurement, Labor Freedom 57.7 Create a Graph using this measurement, Monetary Freedom 82.0 Create a Graph using this measurement. A November 2019 snap election resulted in an even more fragmented parliament, with the conservative Vox party surging to third place at the expense of the main center-right People’s Party. [31] 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. Since returning to democracy in 1975, Spain has become the eurozone’s fourth-largest economy. [44], A European Commission forecast had predicted Spain would enter the world's late 2000s recession by the end of 2008. Its overall score has increased by 1.2 points, due primarily to a higher fiscal health score. [56], Spain's economy had created more than half of all the new jobs in the European Union over the five years ending 2005. NATIVE AMERICANS, TREATMENT OF (SPAIN VS. ENGLAND) (ISSUE) When Christopher Columbus landed on the island of Hispaniola in 1492, he met natives there. This was particularly evident in economic and social thinking. [38], 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. [32] Although estimates of the hidden economy vary, the real Spanish GDP may be around 20% bigger as it is estimated that the underground economy of Spain moves annually 190 billion Euros (US$224 billion). [120] The 2017 survey repeated this finding. [31] According to the most recent 2017 data, about 65% of the country's exports go to other EU members.[118]. Read more about Spain Economy. EUR). There are 12 banking groups. [51] Studies by most independent forecasters estimate that the rate had actually dropped to 0.8% instead,[52] below the strong 3% plus GDP annual growth rates during the 1997–2007 decade. [80], This started a trend of setting successive positive employment records. [132], The boom was shaped during the 2004-2014 period, when Spain's agribusiness exports grew by 95% led by pork, wine and olive oil. However, commentators pointed out that Spain's recovery was fragile, that the public debt was growing quickly, that troubled regional banks may need large bailouts, growth prospects were poor and therefore limiting revenue and that the central government has limited control over the spending of the regional governments. [22], Following the financial crisis of 2007–2008, the Spanish economy plunged into recession, entering a cycle of negative macroeconomic performance. [25] 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. [87], In 2019, Pedro Sánchez's socialist government increased the minimum wage by 22% in an attempt to boost hiring and encourage spending. The top individual income tax rate is 45 percent, and the top corporate tax rate is 25 percent. [126], The headquarters of the World Tourism Organization are located in Madrid. Unemployment shot up. [113] There are four other Spanish ports in the ranking of the top 125 busiest world seaports (Algeciras, Barcelona, Las Palmas, and Bilbao); as a result, Spain is tied with Japan in the third position of countries leading this ranking. [97][circular reference] [55] Home prices soared by 71% between 2003 and 2008, in tandem with the credit explosion.[55]. USD (1,571.8 bil. Trade Freedom 86.4 Create a Graph using this measurement, Investment Freedom 85.0 Create a Graph using this measurement, Financial Freedom 70.0 Create a Graph using this measurement. [62] 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. [62] In this regard, home sales are expected to return in 2017 to pre-crisis (2008) level. [37], When Spain joined the EEC in 1986 its GDP per capita was about 72% of the average of its members. Members of the opposition argued that this increase from €858 to €1050 a month would negatively affect 1.2 million workers due to their employers being unable to cover the aforementioned raise.[88]. [81] Labor reform seemed to play an important role; one piece of evidence cited was that Spain had started creating jobs at lower rates of GDP growth than before: in previous cycles, employment rose when growth hit 2%, this time the gain came during a year when GDP had expanded by just 1.2%. [54], The adoption of the Euro in 2002 had driven down long-term interest rates, prompting a surge in mortgage lending that jumped more than fourfold from 2000 to its 2010 apex. Another contribution to the success of Spanish firms may have to do with booming interest toward Spanish language and culture in Asia and Africa, but also a corporate culture that learned to take risks in unstable markets. The overall regulatory environment remains burdensome, but bankruptcy laws, which were reformed in 2014, are fair and transparent. [138] It is also the largest producer and exporter of strawberries in the EU.[139]. [127], The automotive industry is one of the largest employers in the country. In particular, during the month of October 2008, Spain suffered its worst unemployment rise ever recorded. Due to its own economic development and the EU enlargements to 28 members, by 2007 Spain had achieved a GDP per capita of 105% of European Union's average, which placed it slightly ahead of Italy (103%). [46] Spain's government forecast the unemployment rate would rise to 16% in 2009. These deals cumulate to an overall value of 1,935 bil. [27] In just two years (2014–2015) the Spanish economy had recovered 85% of the GDP lost during the 2009-2013 recession,[28] which got some international analysts to refer to Spain's current recovery as "the showcase for structural reform efforts". 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. [78] Youth unemployment remains a concern in Spain, prompting researchers such as Anita Wölfl to suggest that Spain could decrease unemployment by making labor market programs and job-search assistance accessible to the most disadvantaged youth. Spain's largest bank, Banco Santander, took part in the UK government's bail-out of part of the UK banking sector. [57][58] At the top of its property boom, Spain was building more houses than Germany, France and the U.K. This figure was revised down by the Spanish Ministry of Economy to 1.6. [14], After 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. Spain has signed many treaties with other countries to avoid double taxation. © 2020 by The Heritage Foundation. [70], 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. [69], On the other side, trade unions, left, and center-left parties criticize and want the reform to be revoked, on grounds that it tilts the balance of power too far towards employers. The average trade-weighted applied tariff rate (common among EU members) is 1.8 percent, with 637 EU-mandated nontariff measures reportedly in force. Other taxes include a value-added tax. Indeed, Spain's large commercial banks have been able to capitalize on their strong position to buy up distressed banking assets elsewhere in Europe and in the United States. Investors who bought into such banks must be aware. Bilateral Economic Relations. Spain - Spain - Spain in 1600: It is not surprising that the enormous exertions of the last quarter of the 16th century, with its mixture of triumphs, disappointments, and miseries, should have been followed by a general mood of introspection and even disenchantment. In the late 1950s, the economic growth in America and Europe—often called Wirtschaftswunder (ger: economic miracle) —brought up a new form of economy: mass consumption economy. [71][72], By July 2009, it had shed 1.2 million jobs in one year. The term also refers to the “European Communities,” which originally comprised the European Economic Community (EEC), the European Coal and Steel Community (ECSC; dissolved in 2002), and the European Atomic In recent years foreign trade has taken refuge outside the European Union. The trade surplus attained in 2013 has been consolidated in 2014 and 2015. In Africa, countries producing oil (Nigeria, Algeria, Libya) are important partners, as well as Morocco. Spanish electricity usage constituted 88% of the EU15 average (EU15: 7,409 kWh/person), and 73% of the OECD average (8,991 kWh/person). Since the 1990s some Spanish companies have gained multinational status, often expanding their activities in culturally close Latin America, Eastern Europe and Asia. The government has stepped up efforts to subsidize purchases of electric cars, light-commercial vehicles, and motorcycles. [133] By 2012 Spain was by far the biggest producer of olive oil in the world, accounting for 50% of the total production worldwide. Here is a list of the top 10 deals with Spanish participation: During the last four decades the Spanish tourism industry has grown to become the second biggest in the world, worth approximately €40 billion, about 5% of GDP, in 2006. [55], By 2017, following several months of prices picking up, homeowners who had been renting during the economic slump had started to put their properties back on the sales market. [115] Since 2014 Spain has been registering steady annual fall in the official jobless figure. The economy of Spain is the world's fourteenth-largest by nominal GDP as well as one of the largest in the world by purchasing power parity.The country is a member of the European Union, the Organization for Economic Co-operation and Development and the World Trade Organization. During 2016 unemployment in Spain experienced the steepest fall on record to date. Spain’s diversified economy includes manufacturing, financial services, pharmaceuticals, textiles and apparel, footwear, chemicals, and a booming tourism industry. See more from the 2020 Index. See how Spain compares to another country using any of the measures in the Index. [59][60][61], Following the 2008 peak, home prices then plunged by 31%, before bottoming out in late 2014. The Spanish economy has been rated moderately free for nine years. Then Spain suffered a severe setback from October 2008, when it saw its unemployment rate surge to 1996 levels. It was not a sovereign bailout in that the funds were used only for the restructuring of the banking sector a full-fledged bailout for an economy the size of the Spanish would have reached ten or twelve times that amount). [74] In all, by early 2013 Spain reached an unprecedented unemployment record at about 27%. Latin American countries are very important trading partners, like Argentina, Mexico, Cuba (tourism), Colombia, Brazil, Chile (food products) and Mexico, Venezuela and Argentina (petroleum). The overall tax burden equals 33.7 percent of total domestic income. On the one hand, agricultural funds from the Common Agricultural Policy of the European Union (CAP) are now spread across more countries. [25], In 2015, the Spanish GDP grew by 3.2%, a rate not seen since 2007, the last year before the world financial crisis struck. [62] The phenomenon is most visible in big cities such as Barcelona or Madrid, which are seeing new record average prices, partially fueled by short-term rentals to tourists.[62]. Spanish exports grew by 4.2% in 2013, the highest rate in the European Union. [24] The surplus kept strengthening during 2014 and 2015. [91][30], 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. In the 2012–13 edition of the Global Competitiveness Report Spain was listed 10th in the world in terms of first-class infrastructure. [117], In 2016, exports of goods hit historical highs despite a global slowdown in trade, making up for 33% of the total GDP (by comparison, exports represent 12% of GDP in the United States, 18% in Japan, 22% in China or 45% in Germany). The Spanish economy is the fifth-largest in Europe behind Germany, the United Kingdom, France and Italy as well as the fourth-largest in the eurozone based on nominal GDP statistics. The international accounting firm, PriceWaterhouseCooper, estimated an imbalance between CAM's assets and debts of €3,500 million, not counting the industrial corporation. [105] This early global expansion gave Spanish companies a competitive advantage over some of Spain's competitors and European neighbors. Source for information on Native Americans, Treatment of (Spain Vs. England) (Issue): Gale Encyclopedia of U.S. Economic History dictionary. GDP growth has decelerated in the past two years as private consumption growth has slowed slightly and external demand has softened more significantly. [30] By Q4 2016 Spanish unemployment had fallen to 18.6%, the lowest rate in seven years. Principal trading partners in Asia are Japan, China, South Korea, Taiwan. Spain is ranked 31st among 45 countries in the Europe region, and its overall score is slightly below the regional average and well above the world average. [114] The Spanish tax authority (Agencia Tributaria) maintains an up-to-date list of treaties. [128], By 2016, the automotive industry was generating 8.7 percent of Spain's gross domestic product, employing about nine percent of the manufacturing industry. Spain’s accession to the European Union (EU) in 1986 required the country to open its economy to trade and investment, modernize its industrial base, improve infrastructure, and revise economic legislation to conform to EU guidelines. [31], One of the main drivers of economic recovery is international trade, in turn sparked by dramatic gains in labor productivity. [42], 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. During that time Spain capital inflows –including short term speculative investment– financed a large trade deficit. Spain’s economic freedom score is 66.9, making its economy the 58th freest in the 2020 Index. Unfortunately, the socialist government has proposed an ambitious plan for new spending programs as well as rollbacks of the last center-right government’s labor code reforms. The total value of exports and imports of goods and services equals 66.6 percent of GDP. Spanish companies invested in fields like biotechnology and pharmaceuticals, or renewable energy (Iberdrola is the world's largest renewable energy operator[106]), technology companies like Telefónica, Abengoa, Mondragon Corporation, Movistar, Gamesa, Hisdesat, Indra, train manufacturers like CAF and Talgo, global corporations such as the textile company Inditex, petroleum companies like Repsol and infrastructure firms. However, as the recession deepened and property prices slid, the growing bad debts of the smaller regional savings banks, the "cajas", forced the intervention of Spain's central bank and government through a stabilization and consolidation program, taking over or consolidating regional "cajas" and finally receiving a bank bailout from the European Central Bank in 2012 aimed specifically for the banking business and "cajas" in particular. Overview: In August 2020 Spain exported €17.8B and imported €19.5B, resulting in a negative trade balance of €1.66B.Between August 2019 and August 2020 the exports of Spain have decreased by €-1.76B (-8.99%) from €19.6B to €17.8B, while imports decreased by €-3.97B (-16.9%) from €23.5B to €19.5B. 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. [45] At the time, Spain's Economy Minister was quoted saying, "Spain is facing its deepest recession in half a century". Under the structure of shared governmental responsibilities that has evolved since 1975, much responsibility for spending had been given back to the regions. Spain has a capitalist mixed economy. [23] The economic situation started improving by 2013–2014. In 1958, John Kenneth Galbraith (1908–2006) was the first to speak of an affluent society. [125] 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. [102][103] 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. The government enforces anticorruption laws on a generally uniform basis. [82], Greater than expected GDP growth has paved the way for further declines in the unemployment rate. [122] With 83.7 million visitors, the country broke in 2019 its own tourism record for the tenth year in a row. [35] The ESM approved up to €100 billion in assistance, although, in the end, Spain only drew €41.3 billion. The lion's share of that investment —€4 billion— went to the country's auto industry. Nearly all sectors are open to foreign investment, and approval procedures have been streamlined. [130], Spain is one of the world leaders in renewable energies, both as a producer of renewable energy itself and as an exporter of such technology. The ESADE business school predicted 20%. [29], By Q2 2016 the Spanish economy had been accumulating 12 consecutive quarters of growth, managing to consistently outperform the rest of the Euro area. [30] In this regard, the Spanish economy is forecast to remain the best-performing major economy in the eurozone also in 2017. [25] Then, during the economic downturn, Spain reduced significantly imports due to domestic consumption shrinking while – despite the global slowdown – it has been increasing exports and kept attracting growing numbers of tourists. Alternatively, travelers to the United States may provide documentation from a licensed health care provider of having recovered from COVID … This allowed the banks, particularly the geographically and industrially diversified large banks like BBVA and Santander, to weather the real estate deflation better than expected. [25], Despite slightly declining exports from fellow EU countries in the same period, Spanish exports continued to grow and in the first half of 2016 the country beat its own record to date exporting goods for 128,041 million euros; from the total, almost 67% were exported to other EU countries. Some senior German policy makers went as far as to say that emergency bailouts should include harsh penalties to EU aid recipients such as Greece. 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. [38], At the second half of the 1990s, the conservative government of former prime minister Jose María Aznar had worked successfully to gain admission to the group of countries joining the euro in 1999. combined. Labor-market reform is urgently needed both to facilitate hiring and job growth and to bring more workers into the formal economy. The principal obstacles to greater economic freedom in Spain are the lack of labor freedom and, especially, the size and the cost of government. Población por municipios /Estadística del Padrón continuo. [68] 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. Three regions were included in the leading EU group exceeding 125% of the GDP per capita average level: the Basque Country , Madrid, and Navarre. [79], In May 2012 a radical labor reform made for a more flexible labor market, facilitating layoffs with a view to enhancing corporate's confidence. 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. By 2014 the structural unemployment rate was estimated at 18%. In the past, weak points of Spain's economy included high inflation[41] and large underground economy. [40] 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%. In return for the credit line etended by the EMS, there were no tax or macroeconomic conditions. [38], The downside of the real estate boom was a corresponding rise in the levels of private debt, both of households and of businesses; as prospective homeowners had struggled to meet asking prices, the average level of household debt tripled in less than a decade.
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