Economic overview Spain, in 36 editions.

This Western capitalistic economy has done well since Spain joined the European Economic Community EC in 1986. With annual increases in real GNP of 5.5% in 1987 and averaging about 5% in 1988 and 1989, the 1987-90 period, Spain has been the fastest growing member of the EC. Increased investment--both domestic and foreign--has been the most important factor pushing the economic expansion. Inflation moderated to 4.8% in 1988, but an overheated economy caused inflation to reach an estimated almost 7% in 1989. 1989-90. Another economic problem facing Spain is an unemployment rate of 16.5%, 16.3%, the highest in Europe.

Spain's mixed capitalist economy supports a GDP that
on a per capita basis is three-fourths that of the four leading West
European economies. Its
center-right government has staked much on
gaining admission to the
first group of countries to implement the
European single currency by
developing an austere 1997 budget - including a wage freeze for and, based on economic indicators, Madrid
public-sector employees - appears poised to be in hopes of meeting EMU from the Maastricht monetary
convergence criteria. outset. The government slashed spending by $1.6 billion deficit-to-GDP ratio
in mid-1996 is 2.3%, the debt-to-GDP ratio is expected to ensure that Spain's deficit did not exceed its target be around 68%, and
of 4.4% of GDP for the year; inflation is approximately 2%. Moreover, the government forecasts a deficit of 3%
for 1997. The AZNAR administration advocates liberalization, has
continued to advocate liberalization, privatization, and deregulation
of the economy, and has introduced
some tax reforms to that end.
Unemployment, nevertheless, nonetheless, remains the
highest in the EU at about 22%, but the 21%. The
government, for political
reasons, has made only limited progress in
changing labor laws or
reforming pension schemes, which are key to the
sustainability of
both Spain's internal economic advances. advances and its
competitiveness in a single currency area.

Spain's mixed capitalist economy supports a GDP that
that on a per capita basis is three-fourths that of the four leading West
West European economies. Its center-right government has staked much on successfully
gaining worked to gain admission to the first group of countries to implement the launching
the European single currency and, based on economic indicators, Madrid
appears poised to be in EMU from the outset. 1 January 1999. The deficit-to-GDP ratio
ratio is 2.3%, 2.1%, the debt-to-GDP ratio is expected to be around 68%, and
inflation is
approximately 2%. Moreover, the AZNAR administration has
continued
to advocate liberalization, privatization, and deregulation
of the economy,
economy and has introduced some tax reforms to that end.
Unemployment, nonetheless, remains the highest in the EU at 21%. 20%. The
government, for political reasons, has made only limited progress in
changing labor laws or reforming pension schemes, which are key to the
the sustainability of both Spain's internal economic advances and its
its competitiveness in a single currency area. Adjustment to the
monetary and other economic policies of an integrated Europe will
pose difficult challenges to Spain in the next few years.

Spain's mixed capitalist economy supports a GDP
that on a per capita basis is three-fourths that of the four leading
West European economies. Its center-right government successfully
worked to gain admission to the first group of countries launching
the European single currency on 1 January 1999. The deficit-to-GDP
ratio is 2.1%, the debt-to-GDP ratio is around 68%, and inflation is
approximately 2%. Moreover, the AZNAR administration has continued
to advocate liberalization, privatization, and deregulation of the
economy and has introduced some tax reforms to that end.
Unemployment, nonetheless, remains the highest in the EU at 20%. 16%. The
government, for political reasons, has made only limited progress in
changing labor laws or reforming pension schemes, which are key to
the sustainability of both Spain's internal economic advances and
its competitiveness in a single currency area. Adjustment to the
monetary and other economic policies of an integrated Europe - and reducing the unacceptably high level of unemployment - will
pose difficult challenges to Spain in the next few years.

Spain's mixed capitalist economy supports a GDP that on a per capita basis is three-fourths 80% that of the four leading West European economies. Its center-right government successfully worked to gain admission to the first group of countries launching the European single currency on 1 January 1999. The AZNAR administration has continued to advocate liberalization, privatization, and deregulation of the economy and has introduced some tax reforms to that end. Unemployment, nonetheless, Unemployment has been steadily falling under the AZNAR administration but remains the highest in the EU at 16%. 14%. The government, for political reasons, has made only limited government intends to make further progress in changing labor laws or and reforming pension schemes, which are key to the sustainability of both Spain's internal economic advances and its competitiveness in a single currency area. Adjustment Adjusting to the monetary and other economic policies of an integrated Europe - and further reducing the unacceptably high level of unemployment - will pose difficult challenges to Spain in the next few years.

Spain's mixed capitalist economy supports a GDP that on a per capita basis is 80% that of the four leading West European economies. Its center-right government successfully worked to gain admission to the first group of countries launching the European single currency on 1 January 1999. The AZNAR administration has continued to advocate liberalization, privatization, and deregulation of the economy and has introduced some tax reforms to that end. Unemployment has been steadily falling under the AZNAR administration but remains the highest in the EU high at 14%. 11.3%. The government intends to make further progress in changing labor laws and reforming pension schemes, which are key to the sustainability of both Spain's internal economic advances and its competitiveness in a single currency area. A general strike in mid-2002 reduced cooperation between labor and government. Adjusting to the monetary and other economic policies of an integrated Europe - and further reducing unemployment - will pose challenges to Spain in over the next few years.

Spain's mixed capitalist economy supports a GDP that on a per capita basis is 80% that of the four leading West European economies. Its center-right government 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 has continued to advocate liberalization, privatization, and deregulation of the economy and has introduced some tax reforms to that end. Unemployment has been steadily falling under the AZNAR administration but remains high at 11.3%. 11.7%. The government intends to make further progress in changing labor laws and reforming pension schemes, which are key to the sustainability of both Spain's internal economic advances and its competitiveness in a single currency area. A general strike in mid-2002 reduced cooperation between labor and government. Growth of 2.4% in 2003 was satisfactory given the background of a faltering European economy. Adjusting to the monetary and other economic policies of an integrated Europe - and further reducing unemployment - will pose challenges to Spain over the next few years.

Spain's mixed capitalist economy supports a GDP that on a per capita basis is 80% that of the four leading West European economies. Its The center-right government of former President 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 has continued to advocate liberalization, privatization, and deregulation of the economy and has introduced some tax reforms to that end. Unemployment has been fell steadily falling under the AZNAR administration but remains high at 11.7%. The government intends to make further progress in changing labor laws and reforming pension schemes, which are key to the sustainability of both Spain's internal economic advances and its competitiveness in a single currency area. A general strike in mid-2002 reduced cooperation between labor and government. Growth of 2.4% in 2003 was satisfactory given the background of a faltering European economy. Incoming President RODRIGUEZ ZAPATERO, whose party won the election three days after the Madrid train bombings in March, plans to reduce government intervention in business, combat tax fraud, and support innovation, research and development, but also intends to reintroduce labor market regulations that had been scrapped by the AZNAR government. Adjusting to the monetary and other economic policies of an integrated Europe - and reducing unemployment - will pose challenges to Spain over the next few years.

The Spanish economy boomed from 1986 to 1990, averaging five percent 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 80% that of the four leading West European economies. The center-right government of former President 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 11.7%. 10.4%. Growth of 2.4% 2.5% in 2003 and 2.6% in 2004 was satisfactory given the background of a faltering European economy. Incoming President The socialist president, RODRIGUEZ ZAPATERO, whose party won the election three days after the Madrid train bombings in March, plans to reduce government intervention in business, combat tax fraud, and support innovation, research has initiated economic and development, but also intends to reintroduce labor market regulations social reforms that had been scrapped by are generally popular among the AZNAR government. masses of people but that are anathema to religious and other conservative elements. Adjusting to the monetary and other economic policies of an integrated Europe - and Europe, reducing unemployment - unemployment, and absorbing widespread social changes will pose challenges to Spain over the next few years.

The Spanish economy boomed from 1986 to 1990, averaging five percent 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 80% that of the four leading West European economies. The center-right government of former President 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 10.4%. 10.1%. Growth of 2.5% in 2003 and 2003, 2.6% in 2004 2004, and 3.4% in 2005 was satisfactory given the background of a faltering European economy. The socialist president, RODRIGUEZ ZAPATERO, has initiated economic and social reforms that are generally popular among the masses of people people, but that are anathema to religious and other conservative elements. Adjusting to the monetary and other economic policies of an integrated Europe, reducing unemployment, and absorbing widespread social changes will pose challenges to Spain over the next few years.

The Spanish economy boomed from 1986 to 1990, 1990 averaging five percent 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 80% that of the four leading West European economies. The center-right government of former President 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 10.1%. 8.1%. Growth of 2.5% in 2003, 2.6% in 2004, and 3.4% in 2005 averaging 3% annually during 2003-06 was satisfactory given the background of a faltering European economy. The socialist Socialist president, RODRIGUEZ ZAPATERO, has initiated economic and social reforms that are generally popular among the masses of people, but that are anathema made mixed progress in carrying out key structural reforms, which need to religious be accelerated and other conservative elements. Adjusting deepened to the monetary and other sustain Spain's strong economic policies growth. Despite the economy's relative solid footing significant downside risks remain including Spain's continued loss of an integrated Europe, reducing unemployment, and absorbing widespread social changes will pose challenges to Spain over competitiveness, the next few years. potential for a housing market collapse, the country's changing demographic profile, and a decline in EU structural funds.

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 80% equal to that of the four 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 8.1%. 7.6%. Growth averaging more than 3% annually during 2003-06 2003-07 was satisfactory given the background of a faltering European economy. The Socialist president, RODRIGUEZ Jose Luis Rodriguez ZAPATERO, has made mixed progress in carrying out key structural reforms, which need to be accelerated and deepened to sustain Spain's strong 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.

Spain's mixed capitalist economy is the 12th 13th 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 0.4% 0.2% in 2010, making Spain the last major economy to emerge from the global recession. The reversal in Spain's economic growth reflects reflected a significant decline in the construction sector, amid an oversupply of housing, housing and falling consumer spending, and slumping exports. 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% 9.2% 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 intervened in one regional oversaw a restructuring of the savings bank sector in 2009, 2010, and investors 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.

Spain's mixed capitalist economy is the 13th largest in the world, and its per capita income roughly matches that of Germany and France. However, after 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% 0.3% in 2010, before expanding moderately in 2011, making Spain the last major economy to emerge from the global recession. The reversal in Spain's economic growth reflected a significant decline economy, however, has once again fallen into recession as deleveraging 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 private sector, fiscal consolidation, and continued high unemployment benefits, weigh on domestic demand and loan guarantees did not prevent a sharp rise in the investment, even though exports have shown signs of resiliency. The unemployment rate, which rate rose from a low of about 8% in 2007 to 20% roughly 25% in 2010. 2012. The economic downturn has also hurt Spain's public finances. The government budget deficit worsened from 3.8% peaked at 11.2% of GDP in 2008 2010 and the process to 9.2% reduce this imbalance has been slow despite Madrid's efforts to raise new tax revenue and cut spending. Spain reduced its budget deficit to 9.4% of GDP in 2010, more than three times 2011, and roughly 6.7% of GDP in 2012, above the euro-zone limit. 6.3% target negotiated between Spain and the EU. Although 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 remain a source of concern for foreign investors, the government's ongoing efforts to cut spending, privatize industries, spending and boost competitiveness through introduce flexibility into the labor market reforms. Spanish banks' high exposure markets are intended to the collapsed domestic construction and real estate market also poses a continued risk for the sector. assuage these concerns. 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 also taking steps to boost confidence in shore up the financial sector banking system, namely by pressuring using up to $130 billion in EU funds to recapitalize struggling banks exposed to come clean about their losses the collapsed domestic construction and consolidate into stronger groups. real estate sectors.

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 0.3% in 2010, before expanding moderately 2010; GDP expanded 0.4% in 2011, making Spain the last major economy to emerge from the global recession. before contracting 1.4% in 2012. The economy, however, economy has once again fallen into recession as deleveraging in the private sector, fiscal consolidation, and continued high unemployment weigh on domestic demand and investment, even though as exports have shown signs of resiliency. The unemployment rate rose from a low of about 8% in 2007 to roughly 25% 26.0% in 2012. The economic downturn has also hurt Spain's public finances. The government budget deficit peaked at 11.2% of GDP in 2010 and the process to reduce this imbalance has been slow despite Madrid's the central government's efforts to raise new tax revenue and cut spending. Spain reduced its budget deficit to 9.4% of GDP in 2011, and roughly 6.7% 7.4% of GDP in 2012, above the 6.3% target negotiated between Spain and the EU. Although Spain's Spain''s large budget deficit and poor economic growth prospects remain a source of concern for foreign investors, the government's government''s ongoing efforts to cut spending and introduce flexibility into the labor markets are intended to assuage these concerns. The government is also taking steps to shore up the banking system, namely by using up to $130 billion in EU funds to recapitalize struggling banks exposed to the collapsed domestic construction and real estate sectors.

After almost 15 years of above average GDP growth, the Spanish economy began to slow in late 2007 and entered into Spain experienced a prolonged recession in the second quarter wake of 2008. the global financial crisis. GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and by another 0.3% in 2010; GDP expanded 0.4% in 2011, before continued contracting 1.4% through most of 2013. Economic growth resumed in 2012. The economy has once again fallen into recession late 2013, albeit only modestly, as deleveraging credit contraction in the private sector, fiscal consolidation, austerity, and continued high unemployment continued to weigh on domestic demand consumption and investment, even as exports investment. Exports, however, have shown signs of resiliency. been resilient throughout the economic downturn, partially offsetting declines in domestic consumption and helped to bring Spain's current account into surplus in 2013 for the first time since 1986. The unemployment rate rose from a low of about 8% in 2007 to 26.0% more than 26% in 2012. The economic downturn has also hurt 2013, straining Spain's public finances. The government finances as spending on social benefits increased while tax revenues fell. Spain’s budget deficit peaked at 11.2% 11.4% of GDP in 2010 and the process to reduce this imbalance has been slow despite the central government's efforts to raise new tax revenue and cut spending. 2009. Spain gradually reduced its budget the deficit to 9.4% of GDP in 2011, and roughly 7.4% just under 7% of GDP in 2012, 2013, slightly above the 6.3% 6.5% target negotiated between Spain and the EU. Although Spain''s large budget deficit and poor economic growth prospects remain a source Public debt has increased substantially – from 60.1% of concern for GDP in 2010 to 93.4% in 2013. Rising labor productivity, moderating labor costs, and lower inflation have helped to improve foreign investors, investor interest in the government''s economy and to reduce government borrowing costs. The government's ongoing efforts to cut spending implement reforms - labor, pension, health, tax, and introduce flexibility into the labor markets education - are intended to assuage these concerns. aimed at supporting investor sentiment. The government is also taking steps to shore up the banking system, namely by using has shored up to $130 billion in EU funds to recapitalize struggling banks exposed to the collapsed Spain's depressed domestic construction and real estate sectors. sectors by successfully completing an EU-funded restructuring and recapitalization program in December 2013.

Spain experienced After experiencing a prolonged recession in the wake of the global financial crisis. crisis that began in 2008, in 2014 Spain marked the first full year of positive economic growth in seven years, largely due to increased private consumption. At the onset of the global financial crisis Spain's GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and continued contracting through most of 2013. Economic growth resumed In 2013 the government successfully shored up struggling banks - exposed to the collapse of Spain's depressed real estate and construction sectors - and in late 2013, albeit only modestly, as January 2014 completed an EU-funded restructuring and recapitalization program.
Until 2014, credit contraction in the private sector, fiscal austerity, and high unemployment continued to weigh weighed on domestic consumption and investment. Exports, however, have been resilient throughout the economic downturn, partially offsetting declines in domestic consumption and helped to bring Spain's current account into surplus in 2013 for the first time since 1986. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, straining but labor reforms prompted a modest reduction to 23.7% in 2014. High unemployment strained Spain's public finances finances, as spending on social benefits increased while tax revenues fell. Spain’s budget deficit peaked at 11.4% of GDP in 2009. 2010, but Spain gradually reduced the deficit to just under 7% of GDP in 2013, 2013-14, slightly above the 6.5% target negotiated between Spain and the EU. Public debt has increased substantially – from 60.1% of GDP in 2010 to 93.4% more than 97% in 2013. 2014.
Exports were resilient throughout the economic downturn and helped to bring Spain's current account into surplus in 2013 for the first time since 1986, where it remained in 2014. Rising labor productivity, productivity and an internal devaluation resulting from moderating labor costs, costs and lower inflation have helped to improve foreign investor interest in the economy and to reduce government borrowing costs. positive FDI flows have been restored.
The government's ongoing efforts to implement reforms - labor, pension, health, tax, and education reforms - are aimed at supporting investor sentiment. The government also has shored up struggling banks exposed to Spain's depressed domestic construction and real estate sectors sentiment - have become overshadowed by successfully completing an EU-funded restructuring political activity in 2015 in anticipation of the national parliamentary elections in November. Spain’s 2015 budget, published in September 2014, rolls back some recently imposed taxes in advance of the elections and recapitalization program leaves untouched the country’s value-added tax (VAT) regime, which continues to generate significantly lower revenue than the EU average. Spain’s borrowing costs are dramatically lower since their peak in December 2013. mid-2012, and despite the recent uptic in economic activity, inflation has dropped sharply, from 1.5% in 2013 to nearly flat in 2014.

After experiencing a prolonged recession in the wake of the global financial crisis that began in 2008, in 2014 Spain marked the first full year of positive economic growth in seven years, largely due to increased private consumption. At the onset of the global financial crisis crisis, Spain's GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and continued contracting through most of 2013. In 2013 2013, the government successfully shored up struggling banks - exposed to the collapse of Spain's depressed real estate and construction sectors - and in January 2014 completed an EU-funded restructuring and recapitalization program.
Until 2014, credit contraction in the private sector, fiscal austerity, and high unemployment weighed on domestic consumption and investment. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, but labor reforms prompted a modest reduction to 23.7% 22% in 2014. 2015. High unemployment strained Spain's public finances, as spending on social benefits increased while tax revenues fell. Spain’s budget deficit peaked at 11.4% of GDP in 2010, but Spain gradually reduced the deficit to just under 7% of GDP in 2013-14, slightly above the 6.5% target negotiated between Spain and the EU. 4.7% of GDP in 2015. Public debt has increased substantially – from 60.1% of GDP in 2010 to more than 97% nearly 101% in 2014. 2015.
Exports were resilient throughout the economic downturn and helped to bring Spain's current account into surplus in 2013 for the first time since 1986, where it remained in 2014. 2014-15. Rising labor productivity and an internal devaluation resulting from moderating labor costs and lower inflation have helped to improve foreign investor interest in the economy and positive FDI flows have been restored.
The government's efforts to implement labor, pension, health, healthcare, tax, and education reforms - aimed at supporting investor sentiment - have become overshadowed by political activity in 2015 in anticipation of the national parliamentary elections in November. December. The European Commission criticized Spain’s 2015 budget, published in September 2014, rolls back some recently imposed taxes in advance 2016 budget for its easing of the elections austerity measures and leaves untouched the country’s value-added tax (VAT) regime, which continues to generate significantly lower revenue than the EU average. its alleged overly optimistic growth and deficit projections. Spain’s borrowing costs are dramatically lower since their peak in mid-2012, and despite the recent uptic uptick in economic activity, inflation has dropped sharply, from 1.5% in 2013 to nearly flat a negative 0.6% in 2014. 2015.

After experiencing a prolonged recession in the wake of the global financial crisis that began in 2008, in 2014 2016 Spain marked the first third full year of positive economic growth in seven nine years, largely due to increased private consumption. At the onset of the financial crisis, Spain's GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and continued contracting through most of 2013. In 2013, that year, the government successfully shored up struggling banks - exposed to the collapse of Spain's depressed real estate and construction sectors - and in January 2014 completed an EU-funded restructuring and recapitalization program. program for its financial sector.
Until 2014, credit contraction in the private sector, fiscal austerity, and high unemployment weighed on domestic consumption and investment. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, but labor reforms prompted a modest reduction to 22% 19.7% in 2015. 2016. High unemployment has strained Spain's public finances, as spending on social benefits increased while tax revenues fell. Spain’s budget deficit peaked at 11.4% of GDP in 2010, but Spain gradually reduced the deficit to just under 7% about 5% of GDP in 2013-14, 2015, and 4.7% 4.1% of GDP in 2015. 2016. Public debt has increased substantially – from 60.1% of GDP in 2010 to nearly 101% 99.5% in 2015. 2016.
Exports were resilient throughout the economic downturn and helped to bring Spain's current account into surplus in 2013 for the first time since 1986, where it remained in 2014-15. through 2016. Rising labor productivity and an internal devaluation resulting from moderating labor costs and lower inflation have helped to improve foreign investor interest in the economy and positive FDI flows have been restored.
The government's efforts Political gridlock after the national elections in December 2015 and June 2016 and ensuing government formation process constrained the caretaker government’s ability to implement needed labor, pension, healthcare, health care, tax, and education reforms - aimed at supporting investor sentiment - have become overshadowed by political activity in 2015 in anticipation of the national parliamentary elections reforms— in December. 2016. The European Commission criticized Spain’s 2016 budget for its easing of austerity measures and for its alleged overly optimistic growth and deficit projections. Spain’s borrowing costs are dramatically lower since their peak in mid-2012, and despite the recent uptick in economic activity, inflation has dropped sharply, from 1.5% in 2013 to a negative 0.6% 0.3% in 2015. 2016.

After experiencing a prolonged recession that began in 2008 in the wake of the global financial crisis that began in 2008, in 2016 crisis, Spain marked the third fourth full year of positive economic growth in nine years, 2017, with economic activity surpassing its pre-crisis peak, largely due to because of increased private consumption. At the onset of the The financial crisis, Spain's GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and continued contracting through most crisis of 2008 broke 16 consecutive years of economic growth for Spain, leading to an economic contraction that lasted until late 2013. In that year, the government successfully shored up its struggling banks banking sector - heavily exposed to the collapse of Spain's depressed Spain’s real estate and construction sectors boom - and in January 2014 completed with the help of an EU-funded restructuring and recapitalization program for its financial sector.
program. Until 2014, credit contraction in the private sector, bank lending, fiscal austerity, and high unemployment weighed on constrained domestic consumption and investment. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, but labor reforms prompted a modest reduction to 19.7% 16.4% in 2016. 2017. High unemployment has strained Spain's public finances, as spending on social benefits increased while tax revenues fell. Spain’s budget deficit peaked at 11.4% of GDP in 2010, but Spain gradually reduced the deficit to about 5% of GDP in 2015, and 4.1% 3.3% of GDP in 2016. 2017. Public debt has increased substantially – from 60.1% of GDP in 2010 to nearly 99.5% 96.7% in 2016.
Exports were resilient throughout the economic downturn and 2017. Strong export growth helped to bring Spain's current account into surplus in 2013 for the first time since 1986, where it remained through 2016. Rising 1986 and sustain Spain’s economic growth. Increasing labor productivity and an internal devaluation resulting from moderating labor costs and lower inflation have helped to improve improved Spain’s export competitiveness and generated foreign investor interest in the economy and positive economy, restoring FDI flows have been restored.
Political gridlock after flows. In 2017, the national elections in December 2015 and June 2016 and ensuing government formation process Spanish Government’s minority status constrained the caretaker government’s its ability to implement needed controversial labor, pension, health care, tax, and education reforms— in 2016. reforms. The European Commission criticized Spain’s 2016 expects the government to meet its 2017 budget for easing austerity measures deficit target and for its alleged overly optimistic anticipates that expected economic growth and in 2018 will help the government meet its deficit projections. target. Spain’s borrowing costs are dramatically lower since their peak in mid-2012, and despite the recent uptick in increased economic activity, inflation activity has dropped sharply, from 1.5% in 2013 to generated a negative 0.3% modest level of inflation, at 2% in 2016. 2017.

After a prolonged recession that began in 2008 in the wake of the global financial crisis, Spain marked the fourth full year of positive economic growth in 2017, with economic activity surpassing its pre-crisis peak, largely because of increased private consumption. The financial crisis of 2008 broke 16 consecutive years of economic growth for Spain, leading to an economic contraction that lasted until late 2013. In that year, the government successfully shored up its struggling banking sector - heavily exposed to the collapse of Spain’s real estate boom - with the help of an EU-funded restructuring and recapitalization program.
Until 2014, contraction in bank lending, fiscal austerity, and high unemployment constrained domestic consumption and investment. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, but labor reforms prompted a modest reduction to 16.4% in 2017. High unemployment strained Spain's public finances, as spending on social benefits increased while tax revenues fell. Spain’s budget deficit peaked at 11.4% of GDP in 2010, but Spain gradually reduced the deficit to about 3.3% of GDP in 2017. Public debt has increased substantially – from 60.1% of GDP in 2010 to nearly 96.7% in 2017.
Strong export growth helped bring Spain's current account into surplus in 2013 for the first time since 1986 and sustain Spain’s economic growth. Increasing labor productivity and an internal devaluation resulting from moderating labor costs and lower inflation have improved Spain’s export competitiveness and generated foreign investor interest in the economy, restoring FDI flows.
In 2017, the Spanish Government’s minority status constrained its ability to implement controversial labor, pension, health care, tax, and education reforms. The European Commission expects the government to meet its 2017 budget deficit target and anticipates that expected economic growth in 2018 will help the government meet its deficit target. Spain’s borrowing costs are dramatically lower since their peak in mid-2012, and increased economic activity has generated a modest level of inflation, at 2% in 2017.

After a prolonged recession that began in 2008 in the wake of the global financial crisis, Spain marked the fourth full year of positive economic growth in 2017, with economic activity surpassing its pre-crisis peak, largely because of increased private consumption. The financial crisis of 2008 broke 16 consecutive years of economic growth for Spain, leading to an economic contraction that lasted until late 2013. In that year, the government successfully shored up its struggling banking sector - heavily exposed to the collapse of Spain’s real estate boom - with the help of an EU-funded restructuring and recapitalization program.
Until 2014, contraction in bank lending, fiscal austerity, and high unemployment constrained domestic consumption and investment. The unemployment rate rose from a low of about 8% in 2007 to more than 26% in 2013, but labor reforms prompted a modest reduction to 16.4% in 2017. High unemployment strained Spain's public finances, as spending on social benefits increased while tax revenues fell. Spain’s budget deficit peaked at 11.4% of GDP in 2010, but Spain gradually reduced the deficit to about 3.3% of GDP in 2017. Public debt has increased substantially – from 60.1% of GDP in 2010 to nearly 96.7% in 2017.
Strong export growth helped bring Spain's current account into surplus in 2013 for the first time since 1986 and sustain Spain’s economic growth. Increasing labor productivity and an internal devaluation resulting from moderating labor costs and lower inflation have improved Spain’s export competitiveness and generated foreign investor interest in the economy, restoring FDI flows.
In 2017, the Spanish Government’s minority status constrained its ability to implement controversial labor, pension, health care, tax, and education reforms. The European Commission expects the government to meet its 2017 budget deficit target and anticipates that expected economic growth in 2018 will help the government meet its deficit target. Spain’s borrowing costs are dramatically lower since their peak in mid-2012, mid-2012 and increased economic activity has generated a modest level of inflation, at 2% in 2017.

high-income core EU high-income, core-EU and eurozone economy; strong growth driven by public consumption, tourism, and other service exports; tight labor market despite high structural unemployment; government debt remains high amid deficit reductions; innovation efforts to narrow persistent fiscal deficits through tax and economic freedom ranked lower than EU spending measures; high but declining unemployment supported by job growth and OECD peers immigration