SPANISH ECONOMY

Group 5
Arunika Megha (M19-039)
Bharath P (M19-049)
Fahid Latheef A (M19-061)
Nagarajan R K (M19-094)
Sanjay G Menon (M19-136)
Gross Domestic Product (GDP)

• GDP Growth as of 2017: 3.1%

• GDP distribution across various sectors:
Services - greatest contributor
• GDP trends over the past decade.
• Black economy accounts to almost 17% of Spain’s GDP.
Spanish Crisis
 Disproportionate growth in the real estate industry and its effect on banking
sector.
 The global economic crisis of 2008.

Impact of crisis
 Started off in the 2nd quarter of 2007, and extended till last quarter of 2009.
 The economy experienced recession for 7 consequent quarters, which was
unusually long.
 The hardest impact was felt in the 1st quarter of 2009, when GDP fell 6.3% and
unemployment increased by .8 million.
 Spain lost 9% of GDP from 2008 to 2013.
 Private consumption fell by 14%.
Inflation Rate and Unemployment

• The inflation rate maintains an inverse relation with unemployment.

 Interest Rate
The European Central bank sets the interest rate benchmark of Spain.
Current Interest rate: 1.37% (June 2018)
Exchange rate, exports and imports

Official currency Euro: 1$ = 0.88€

Exchange rate Imports Net Exports

Exchange rate Exports Net Exports

Economy revival
 Rigid labor market Flexible
 Wage bargaining at firm level.
 Redundancy pay was cut from 45 days per year to 33 days.
 Slashed public investment and reduced other spending.
 100billion Euro loan from EU.
 Cleaning of Financial system
 Arrears to suppliers were cleared by the regional government.
Aftermath
• Current Account Surplus of 2%.
• Labor cost is below Eurozone Average in all years , except 2018.
• World-class infrastructure.
• Tourism sector growth- 2nd largest in the world in terms of revenue.
• No. of exporting firms have increased since 2011.
References
• https://www.economist.com/special-report/2018/07/26/spains-economy-
is-changing
• www.ceicdata.com
• www.tradingeconomies.com
• data.worldbank.org