Is Spain's growth over?

Résumé du document

In the last three decades, Spain has been transformed from a rural, backward, agricultural country into a nation with a diversified economy with strong manufacturing and service sectors. Between 1961 and 1973, the Spanish economy grew at 7% a year and in 1963 the per capita income of the Spanish economy reached $500 a year. Thus, Spain became a developed nation as defined by the United Nations and not yet a developing country. After its entry in the European Union in 1986, Spain was once again recognized as one of the world's fastest growing economies, with an annual growth averaging 4.1% between 1986 and 1991. The average growth of the European Union was then 3%. Today, the Spanish economy is the fifth largest in Europe. Though we cannot deny that the Spanish growth is not as rapid as before, an we conclude that it is over?

Extraits

[...] After joining the EU in 1986, Spain once again had one of the world's fastest growing economies with its annual growth averaging in the period between 1986 and 1991, compared with the EU average of 3%. Likewise, foreign trade grew from $ 23.8 in 1975 to $ 52.5 billion in 1980 and to $143 billion in 1990. Between 1977 and 1986, representatives of government, labor, and employers' groups negotiated wage policy with the purpose of gradually moderating wages to tame inflation. [...]

[...] By the mid-1970s, Spain enjoyed a strong, modern capitalist economy. Spain's annual growth rate in the first half of the 1970s held steady at 6 percent, ranking it eighth in the world in terms of GDP measured at current prices and current exchange rates, according to the Organization for Economic Co-operation and Development (OECD). Only the United States, Japan, West Germany, France, the United Kingdom, Canada, and Italy placed ahead of Spain in 1975. Of all the OECD capitalist countries with strong economies, Spain was the only one without a democratic government. [...]

[...] Moreover, it seems that the political problems in Spain with ETA and terrorism have a disturbing impact on the economy. Finally, a modernization of the Spanish economy is today necessary to adapt to the new challenges (globalization, invest in developing countries) and to stay in the top ten of the economies of the developed countries. Spain's economy is slowing faster than anticipated but is unlikely to fall into recession, Finance Minister Pedro Solbes said Thursday. rule out the possibility of recession, if what we mean by recession is two consecutive quarters of negative growth," Solbes said. [...]

[...] Thus, the Spanish growth of today suffers some problems Unemployment, at over has fallen sharply in recent years, but is still widespread. Productivity gains have also been meagre, and in fact trailed average gains in the euro area by some 0.2 percentage points over 1995- 2003. Inflation, though, is relatively high, with the surge in house prices a cause for concern. The Spanish economy is handicapped by its lack of modern machinery and technology (over 90% of Spanish industrial plant is out of date and needs replacing), particularly computer technology, coupled with poor efficiency and organisation. [...]

[...] There are 3 main structural problems that the Spanish economy faces, despite recent liberalizing and modernizing efforts. The first is illegal immigration, which makes a particularly large impact on the agricultural labor market of southern Spain. The second problem is high unemployment compared to the rest of Europe. The unemployment is still high compared to most other western industrialized states. Many economists fear that the high rate has only contributed to the black market in labor, although there are no firm and credible estimates of what percentage of the economy this actually constitutes. [...]