Spanish Economy Growing Three Times Faster than UK

Spanish Economy Growing Three Times Faster than UK

Spain continues its incredible recovery 

The New York Times is calling it the end of a the nightmare, while other media outlets took a more sedate approach to reporting the latest official economic data from the Spanish government; not only is the Spanish economy growing, but it’s growing at a much faster rate than the rest of Europe.

It’s been almost a decade – that’s ten years – since the worst economic crash since the Second World War hit Spain, leaving millions out of work and pushing thousands to just give up and leave Spain behind. Most believed that they would be displaced for the rest of their lives, a sign of just how deep the financial abyss Spain was dealing with between 2008 and 2012 was.

But the slow, steady, sometimes painful reforms to labour and the economy has given Spain the necessary power to climb out of the slumps and post economic growth of 0.9% across the second quarter of 2017.

This figure might not sound impressive, but it’s actually a sign of incredible performance; by itself as well as in a wider context. A growth rate of 0.9% is 3 times higher than the growth of the UK, and around twice the growth of France; which saw economic growth of 0.5% during the same period.

The figure is even more impressive in context, given that Spain was one of the two countries in Europe facing a double dip recession in the credit crunch. This data from the second quarter also marks the continuation of growth pushing economic growth in Spain past 3% for the second year in a row – which would make it the best performing economy in Europe.

Spanish unemployment plummeted to 26% during the worst parts of the crisis. These days unemployment has been brought down to 17.2% and it continues to fall. HIS Markit economist Raj Badiani suggests that the growth of consumer spending regained momentum during the second quarter following strong job creation and the overall financial climate.

It seems the strong performance of Spain may give some inspiration to the new President of France Emmanuel Macron, who is currently considering introducing labour reforms to France that are similar to those employed by Spain since 2010; including loosening employment laws that made it easier for companies to lay off their workers. This has had an effect of companies becoming more willing to hire new staff, knowing that they are not tied down by long-term employment contracts.

The reforms have helped boost the manufacturing sector of Spain, boosting the export economy of the country. Exports are now accounting for around a third of Spanish economic output, higher than the less-than-one-quarter seen a few years ago.

As exports are on the up, the local governments of Spain have also been able to increase tax takes, with the money spreading into the wider economy; as seen in the increase of infrastructure projects being constructed nationwide.

Spain has picked itself up and is looking healthier and more stable than ever.