According to the World Bank, Spains economy is the ninth largest worldwide and the fifth largest in Europe. It is also the 3rd largest world investor. As of 2007, absolute GDP was valued at $1,439,000 trillion according to the CIA Factbook. The per capita PPP is estimated at $33,600 (2007), a level similar to those of France and Japan. As late as 2007 the economy grew at 3.8% after a long period of robust growth. However the bursting of the property bubble saw a rapid slowdown in 2008, which brought the country into official recession by February 2009.
Starting with the “Stabilization Plan” of 1959, Francos regime initiated 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 Francos 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 also occurred in other
European countries such as 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 period of severe industrial crisis which lasted approximately a decade (1975-1985). This blow stressed the need to modernize the economy and join the European Community.
Spains accession 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%.
Following peak growth years in the late 1980s, in 1992 the Spanish economy was finally touched by the early 1990s recession; this happened, tellingly, in 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 at 7.6% (October 2006), represented a significant improvement from the 1980s 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 on 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 16 (Slovakia was made the 16th on January 1, 2009) 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.
Agriculture remains a major part of the Spanish economy and employs, along with forestry and fishing, 7 percent of the labour force.
The two main agricultural products are grapes, used to make wine, and olives, used to make olive oil. Other main products include oranges, almonds, cereal grains (especially barley, wheat, and rice), vegetables (especially tomatoes and onions) and root crops (mainly potatoes and sugar beets).
The raising of livestock, especially sheep and goats, is an important industry. In 2002 livestock on farms included 24.3 million sheep, 23.9 million pigs, 6.4 million cattle, and 248,000 horses.
The fishing industry is important to the Spanish economy. The catch consists mostly of sardines, mussels, tuna, hake, and squid.
The main manufactured goods in Spain are textiles, iron and steel, motor vehicles, chemicals, clothing, footwear, ships and boats, refined petroleum, and cement. Spain is one of the world’s leading wine producers. About 31 percent of the labour force is employed in manufacturing, mining, and construction.
Spain is served by a large number of national and international commercial banks. The main stock exchanges are in Madrid, Barcelona, Bilbao, and Valencia.
Spains main imports include machinery, mineral fuels, transportation equipment, food products, metals and metal products, and textiles. Her exports include motor vehicles, machinery, basic metals, vegetable products, chemicals, mineral products, and textiles. France, Germany, Italy, the United Kingdom, Portugal, and the United States are the chief export markets whilst France, Germany, Italy, the United Kingdom, Belgium, the United States, and Japan provide most of the imports. A balance of trade deficit is the norm.
Exports: $192.5 billion f.o.b. (2006 est.)
Export partners: France 19%, Germany 11.4%, UK 9.6%, Portugal 9.5%, Italy 9.3%, United States 4.6% (2002)
Imports: $289.8 billion f.o.b. (2006 est.)
Import partners: France 17%, Germany 16.5%, Italy 8.6%, UK 6.4%, Netherlands 4.8% (2002)
Tourism in Spain
Spain is the worlds third most visited country after the USA and France. Revenue from the 78 million tourists who visited Spain in 2002 helped make up for Spain’s considerable trade deficit. Whilst most Spaniards appreciate the benefits in both employment opportunity and wealth that this brings, in some areas the influx of immigrants into some coastal towns has almost swamped the indigenous residence and caused considerable problems in the areas of education, administration, policing and the supply of utility services, particularly in relation to the supply of drinking water.
It is estimated that Spain receives some 50 million visitors each year
The Spanish Association of Building Promoters state that there are some 300,000 holiday homes owned by non residents in the Alicante region alone. There are also statistics showing that 15% are owned by Brits, that is 45,000. Another survey proclaims that some 50% of these considered they will eventually contemplate retiring to Spain. Additionally, there are a further 7% (21,000) owned by Belgian, Danish, Norwegian and Swedish, a large proportion of whom have English as a second language.