The Economy

Economy - overview
Spain's mixed capitalist economy is the 12th largest in the world, and its per capita income roughly matches that of Germany and France. However, after almost 15 years of above average GDP growth, the Spanish economy began to slow in late 2007 and entered into a recession in the second quarter of 2008. GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and by another 0.2% in 2010, making Spain the last major economy to emerge from the global recession. The reversal in Spain's economic growth reflected a significant decline in construction amid an oversupply of housing and falling consumer spending, while exports actually have begun to grow. Government efforts to boost the economy through stimulus spending, extended unemployment benefits, and loan guarantees did not prevent a sharp rise in the unemployment rate, which rose from a low of about 8% in 2007 to 20% in 2010. The government budget deficit worsened from 3.8% of GDP in 2008 to about 9.7% of GDP in 2010, more than three times the euro-zone limit. Spain's large budget deficit and poor economic growth prospects have made it vulnerable to financial contagion from other highly-indebted euro zone members despite the government's efforts to cut spending, privatize industries, and boost competitiveness through labor market reforms. Spanish banks' high exposure to the collapsed domestic construction and real estate market also poses a continued risk for the sector. The government oversaw a restructuring of the savings bank sector in 2010, and provided some $15 billion in capital to various institutions. Investors remain concerned that Madrid may need to bail out more troubled banks. The Bank of Spain, however, is seeking to boost confidence in the financial sector by pressuring banks to come clean about their losses and consolidate into stronger groups. The Spanish economy boomed from 1986 to 1990 averaging 5% annual growth. After a European-wide recession in the early 1990s, the Spanish economy resumed moderate growth starting in 1994. Spain's mixed capitalist economy supports a GDP that on a per capita basis is equal to that of the leading West European economies. The center-right government of former President Jose Maria AZNAR successfully worked to gain admission to the first group of countries launching the European single currency (the euro) on 1 January 1999. The AZNAR administration continued to advocate liberalization, privatization, and deregulation of the economy and introduced some tax reforms to that end. Unemployment fell steadily under the AZNAR administration but remains high at 7.6%. Growth averaging more than 3% annually during 2003-07 was satisfactory given the background of a faltering European economy. The Socialist president, RODRIGUEZ ZAPATERO, has made mixed progress in carrying out key structural reforms, which need to be accelerated and deepened to sustain Spain's economic growth. Despite the economy's relative solid footing significant downside risks remain including Spain's continued loss of competitiveness, the potential for a housing market collapse, the country's changing demographic profile, and a decline in EU structural funds.
GDP (purchasing power parity):
$1.376 trillion (2010 est.) country comparison to the world: 14 $1.379 trillion (2009 est.) $1.432 trillion (2008 est.) note: data are in 2010 US dollars
GDP (official exchange rate):
$1.375 trillion (2010 est.)
GDP - real growth rate:
-0.2% (2010 est.) country comparison to the world: 192 -3.7% (2009 est.) 0.9% (2008 est.)
GDP - per capita (PPP):
$29,500 (2010 est.) country comparison to the world: 47 $29,800 (2009 est.) $31,200 (2008 est.) note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 2.9% industry: 25.5% services: 71.6% (2010 est.)
Labor force:
22.96 million (2010 est.) country comparison to the world: 27
Labor force - by occupation:
agriculture: 4.2% industry: 24% services: 71.7% (2009 est.)
Unemployment rate:
20% (2010 est.) country comparison to the world: 166 18.1% (2009 est.)
Population below poverty line:
19.8% (2005)
Household income or consumption by percentage share:
lowest 10%: 2.6% highest 10%: 26.6% (2000)
Distribution of family income - Gini index:
32 (2005) country comparison to the world: 103 32.5 (1990)
Investment (gross fixed):
22.9% of GDP (2010 est.) country comparison to the world: 59
Budget:
revenues: $515.8 billion expenditures: $648.6 billion (2010 est.)
Public debt:
63.4% of GDP (2010 est.) country comparison to the world: 27 53.2% of GDP (2009 est.)
Inflation rate (consumer prices):
1.3% (2010 est.) country comparison to the world: 29 -0.3% (2009 est.)
Central bank discount rate:
1.75% (31 December 2010) country comparison to the world: 119 1.75% (31 December 2009) note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area
Commercial bank prime lending rate:
10.72% (31 December 2009 est.) country comparison to the world: 79 11.02% (31 December 2008 est.)
Stock of narrow money:
$849.2 billion (31 December 2010 est.) country comparison to the world: 9 $856.5 billion (31 December 2009 est.) note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 17 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders
Stock of broad money:
$2.264 trillion (31 December 2010 est.) country comparison to the world: 9 $2.451 trillion (31 December 2009 est.)
Stock of domestic credit:
$3.683 trillion (31 December 2009 est.) country comparison to the world: 8 $3.451 trillion (31 December 2008 est.)
Market value of publicly traded shares:
$1.297 trillion (31 December 2009) country comparison to the world: 11 $946.1 billion (31 December 2008) $1.8 trillion (31 December 2007)
Agriculture - products:
grain, vegetables, olives, wine grapes, sugar beets, citrus; beef, pork, poultry, dairy products; fish
Industries:
textiles and apparel (including footwear), food and beverages, metals and metal manufactures, chemicals, shipbuilding, automobiles, machine tools, tourism, clay and refractory products, footwear, pharmaceuticals, medical equipment
Industrial production growth rate:
-2% (2010 est.) country comparison to the world: 161
Electricity - production:
300.5 billion kWh (2008 est.) country comparison to the world: 13
Electricity - consumption:
276.1 billion kWh (2008 est.) country comparison to the world: 14
Electricity - exports:
16.92 billion kWh (2008 est.)
Electricity - imports:
5.88 billion kWh (2008 est.)
Oil - production:
27,230 bbl/day (2009 est.) country comparison to the world: 71
Oil - consumption:
1.482 million bbl/day (2009 est.) country comparison to the world: 17
Oil - exports:
218,600 bbl/day (2008 est.) country comparison to the world: 53
Oil - imports:
1.716 million bbl/day (2008 est.) country comparison to the world: 11
Oil - proved reserves:
150 million bbl (1 January 2010 est.) country comparison to the world: 65
Natural gas - production:
13 million cu m (2009 est.) country comparison to the world: 89
Natural gas - consumption:
33.88 billion cu m (2009 est.) country comparison to the world: 26
Natural gas - exports:
975 million cu m (2009 est.) country comparison to the world: 36
Natural gas - imports:
34.67 billion cu m (2009 est.) country comparison to the world: 9
Natural gas - proved reserves:
2.548 billion cu m (1 January 2010 est.) country comparison to the world: 95
Current account balance:
-$66.74 billion (2010 est.) country comparison to the world: 190 -$80.38 billion (2009 est.)
Exports:
$268.3 billion (2010 est.) country comparison to the world: 18 $224 billion (2009 est.)
Exports - commodities:
machinery, motor vehicles; foodstuffs, pharmaceuticals, medicines, other consumer goods
Exports - partners:
France 19.27%, Germany 11.11%, Portugal 9.21%, Italy 8.24%, UK 6.18% (2009)
Imports:
$324.6 billion (2010 est.) country comparison to the world: 14 $286.8 billion (2009 est.)
Imports - commodities:
machinery and equipment, fuels, chemicals, semifinished goods, foodstuffs, consumer goods, measuring and medical control instruments
Imports - partners:
Germany 15.02%, France 12.82%, Italy 7.17%, China 5.8%, Netherlands 5.22%, UK 4.7% (2009)
Reserves of foreign exchange and gold:
$NA (31 December 2010 est.) $28.2 billion (31 December 2009 est.)
Debt - external:
$2.166 trillion (30 June 2010) country comparison to the world: 10 $2.317 trillion (31 December 2008)
Stock of direct foreign investment - at home:
$668.5 billion (31 December 2010 est.) country comparison to the world: 8 $664 billion (31 December 2009 est.)
Stock of direct foreign investment - abroad:
$641 billion (31 December 2010 est.) country comparison to the world: 9 $634.4 billion (31 December 2009 est.)
Exchange rates:
euros (EUR) per US dollar - 0.755 (2010) 0.7198 (2009) 0.6827 (2008) 0.7345 (2007) 0.7964 (2006) Important Cities Madrid is the capital of Spain. Barcelona is the largest commercial center and tourist destination. Other important cities in Spain include Valencia, La Coruña, Sevilla, Malaga, Granada, Ibiza, Palma de Mallorca and Santa Cruz. Economic Sectors Spain has been progressing economically since the Spanish Civil War in 1939 when its economy was devastated. Today, tourism, industry and agriculture play a major role in the country’s economy. Spain has seen the fastest economic development in Western Europe since the 1960’s. Tourism has played a major role since the 1960’s and in the last 40 years, tourism has been the fastest growing economic sector of the country’s GDP, helping to accelerate growth overall. Millions of visitors flock to Spain and contribute almost $50 billion USD to Spain’s economy each year. Agriculture contributes less than 5% of the nation’s GDP, which is high compared to other countries in Western Europe. Fishing is another important economic sector for Spain. Industry contributes about 35% of Spain’s GDP, but industry is still somewhat dependent on foreign investment. The most common products from this sector are motor vehicles, steel, textiles, chemicals and ships. Economic aid-donor:  ODA, $1.33 billion (1999)  Currency (code):  euro (EUR) note: on 1 January 1999, the European Monetary Union introduced the euro as a common currency to be used by the financial institutions of member countries; on 1 January 2002, the euro became the sole currency for everyday transactions with the member countries  Exchange rates:  euros per US dollar- 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004), 0.886 (2003)  Fiscal year:  calender year