Spain’s annual inflation rate
as of December 2017
Spain’s unemployment rate
as of third-quarter 2017
Steven Wyble is online content editor at Scotsman Guide Media.
Reach him at (800) 297-6061 or firstname.lastname@example.org.
The largest country in southern Europe by land mass and the sixth most populous
country in Europe, Spain’s economy suffered greatly from the global financial crisis
of 2008. The country has made great strides toward recovery, but still faces major
hurdles, such as coping with a high unemployment rate and the threat of secession
from one of its wealthiest regions.
Although Spain’s economy was hit hard by the financial crisis, in 2017 Spain’s gross
domestic product surpassed its pre-crisis peak, representing a “significant milestone”
toward economic recovery, according to the International Monetary Fund (IMF). The
economy grew by 3. 3 percent in 2016, and is expected to grow by 3.1 percent in 2017.
Unemployment remains a barrier to economic prosperity in the country, however.
Even though the unemployment rate in 2017 was the lowest in seven years, at
16. 4 percent, it’s still among the highest in Europe, according to the IMF.
As Spain continues to rebuild its economy, it faces a major political crisis with Catalonia
— a wealthy region in northeastern Spain — and its bid for independence. The region
includes Barcelona and represents almost one-fifth of the country’s economic output.
This past December, Catalonia’s secessionist movement saw unexpected success in
regional parliamentary elections.
Although far from a mandate for secession — secessionist candidates ultimately only
captured 48 percent of the vote — the election results signal that Spain will be dealing
with the independence movement for the foreseeable future. Spain’s economy
minister, Luis de Guindos, said in January that the Catalonian crisis has hampered
growth in the region and cost the country a billion euros (about $1.2 billion based on
the exchange rate as of the start of 2018).
Nonetheless, overall investment in the country is picking up, thanks largely to banks
offering foreclosed assets as cheap investment opportunities to foreign investors,
according to Bloomberg news service. Record-low government bonds also make
investment in Spain’s commercial real estate market attractive. In addition, the country’s
central bank reported this past December that exports were expected to help the economy grow by 0.8 percent in the last three months of 2017, despite the Catalonian crisis.
Demand for office space in both Barcelona and Madrid increased in 2017 because
of job growth, according to a report from Cushman & Wakefield. And a separate
Cushman & Wakefield report notes that the first half of 2017 saw strong activity in
retail capital markets, as evidenced by falling vacancy rates and rising rents.
Investment in Spain’s commercial properties was expected to reach 8. 9 billion euros
(about $10.6 billion) for 2017, near the 2007 pre-crisis peak of 10. 8 billion euros (about
$12.9 billion in current dollars). n
By Steven Wyble
Spain’s year-over-year GDP growth
rate as of third-quarter 2017