Economy of Spain

Spain Economy

From the fading out of the regulated economy of Francoism in 1975, what is now the eighth biggest economic power (by the nominal GDP) in the world, gradually started to evolve and prosper. All the deregulating moves installed by the Francoism, the large infrastructure projects and a gradual opening to tourism, have finally resulted in the paramount economic growth, also famous as the "Spanish Miracle". Democracy came late to the country, but Spain’s economic creativity and especially that of its citizens helped to recover.

As member of the European Community, now (EU) as of 1986 Spain’s economy had to make some improvements to its industrial base, together with revising the economic legislation. With the help of funds from the European Regional Development Fund, Spain has done a lot to improve its infrastructures, and also increased the GDP, while reducing the public debt to GDP ratio and unemployment from 23% to 10%, and inflation to under 3%.

With a population of 40 million and a GDP of $1.352 trillion in 2007 according to the CIA World Factbook, Spain was part of the first group of countries to adopt the Euro as currency and since 1999 growth has annually averaged more than 3%, helping keep the country’s stability and prosperity. Spain’s economy witnessed a tremendous growth, by 3.8 per cent in 2007, having services make up 67% of its economy, industry 30% and agriculture 3%.

However, Spain may be exposed to some imminent problems, since its unemployment rate remains high, at 8.6 per cent, and likely to rise even more, above 10% by the end of the year. The challenge is doubled by the overgrowing aged population and declining birthrate.

Even more, as common to other members of the EU with the Euro being strong, exports are uncompetitive outside the boundaries of EU. However, something has offset this, namely rising of trade in the region, but due to the stalling of this growth, that may as well not even matter anymore.

Spain is also experiencing the largest trade deficit in the world; the housing market is also troublesome, as well as the domestic demand. Furthermore, another major issue is income generated by structural funds of the EU. Together with Ireland, Spain was the beneficiary of funds from the EU, to help their economies upgrade themselves. With per-capita GDP levels of $30,000, and with poorer states joining the EU, those funds are being re-allocated.

I have studied economics for years and love to write about economic trends and conditions. I write for www.economywatch.com and www.economypedia.com.

Article Source: ArticlesBase.com - Economy of Spain