Spain Economy Information
Spain has experienced a transformation in the last three decades which has seen the country go from a rural, backward, agricultural country into a nation which now has a diversified economy with strong manufacturing and service sectors. However, Spain’s bureaucracy still remains firmly rooted in the 1950’s.
Throughout the 1960´s and the early 1970’s, the infamous years of development in Spain, the Spanish economy grew at around 7% a year which witnessed the per capita income of the Spanish economy reaching £500 a year in 1963. This elevated Spain from the ranks of the developing nations (as defined by the UN). After joining the EU in 1986, Spain once again had one of the world’s fastest growing economies with its annual growth averaging just over 4% in the period between 1986 and 1991, compared with the EU average of 3%. Likewise, foreign trade figures also grew from $23.8 in 1975 to $52.5 billion in 1980 and to $143 billion in 1990.
Currently Spain’s economy is the 5th largest in Europe and accounts for approximately 9% of EU output. The per capita income, at 78% of the EU average is among some of the lowest in the EU, although it remains well ahead of Ireland, Portugal and Greece. Spain’s main trading partners are France, Germany and Italy for exports and Germany, France and Italy for imports.
The unemployment rate in Spain has increased in recent years and was last reported to be at just over 20% in the 4th quarter of 2010. From 1983 until 2010, Spain’s unemployment rate averaged 14% reaching a historical high of 20% in June of 2010 and a record low of 8% in March of 2007. The labour work force is defined as the number of people employed plus the number of unemployed seeking work. The non-labour work force includes people who are not looking for work, people who are institutionalised and also those serving in the military.
Spain’s major exports are wine, machinery, motor vehicles and foodstuffs. Spain imports mainly machinery and equipment, fuels, chemicals, semi finished goods, foodstuffs and consumer goods. The EU accounts for 70% of the country’s exports and 59% of imports, the most important trading partners being France and Germany.
Interest rate decisions in Spain are taken by the Governing Council of the European Central Bank. Since January 1999 the ECB has been releasing three main official interest rates. The ECB deposit rate provides a lower bound or floor for the daily European Overnight Interbank Average (EONIA) market rate. The ECB marginal lending rate provides an upper bound or ceiling for the daily EONIA. The 3rd official interest rate relates to the ECBs main refinancing operations (MROs).
Spain’s Gross Domestic Product (GDP) expanded 0.60% in the 4th quarter of 2010 over the same period of the previous year. Unlike the commonly used quarterly GDP growth rate, the annual GDP growth rate takes into account a full year of economic activity, thus avoiding the need to make any type of seasonal adjustment. From 1996 until 2010, Spain’s average annual GDP Growth was 2.84% reaching a historical high of 5.80% in March of 2000 and a record low of -4.20% in June of 2009.
Spain is also the world’s largest producer of olive oil, 4th largest of dried fruit and the 6th largest of citrus fruits. The country’s vineyards are the largest in the world and approximately 60% larger than France’s, although it remains only the 4th highest producer of wine-grapes and ranks 3rd in wine production. Other important crops in Spain include barley, wheat, maze, rice, potatoes, sugar-beet, peppers, avocados, tomatoes, tobacco, hops, oil bearing fruits and cork.
Spain has over 3 million hectares of land under irrigation and employs widespread artificial watering which is often not cost effective. Spanish farmers have been particularly badly hit by falling prices and drought in recent years.