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.

Financial Times Reporting Tranquil Times for Spanish Economy

Financial Times Reporting Tranquil Times for Spanish Economy

Credit seems to be in abundance in the Spanish economy this summer and the banking system of the country is having quite a tranquil time according to the Financial Times. This increase in consumer confidence has led to a stronger property market and more jobs being created.

The economy in spain keeps going from strength to strength.

Unlike Italy, which seems unable to free themselves from the recession, the three year economic recovery of Spain is nothing short of remarkable.

There’s no more talks of bailouts, the amount of bad loans is down, mortgage lending is up, and according to the latest banking stress tests there’s barely any worry, concern, or drama in the banking industry. To put it simply; Spain is doing pretty well thanks. The bankers have come through the bad times and are now enjoying their own tranquil summer.

Spain was approaching the EU for a €100 billion bailout in 2012. Now the banking sector, along with the property industry, has gone through quite an impressive turnaround. The underperforming branches were closed down and staff were either let go or trained to become more efficient. The banking sector has essentially undergone a renovation and come out looking better for it.

The Financial Times said that Spain became the most over-banked country on Earth during their housing boom of 2004-2008. There was one bank branch per 1,000 residents. There are a lot less banks in the country following the crash. The country went from 46,221 to just over 30,000.

The math buffs will be able to see that’s a reduction of over 30%; a trend that wouldn’t be welcome in other countries. It was a necessary step for Spain to take though. The banks have become a welcome boost to the economy following the reforms rather than a profit-driven hindrance like they used to be. These days credit is flowing more freely to both households and small businesses.

Ángel Talavera, the Eurozone analyst at Oxford Economics, told the Financial Times that you need credit to flow properly to create a functioning economy. This was something seen during the recent economic crisis and now banks are beginning to support the recovery. More new loans are being approved than ever; something unseen for years.

José María Roldán, head of the Spanish Banking Association, backed up Talavera’s words. Roldán said that banks are now in a position to support the economic recovery without any problems. They have gone from dragging down the economy to becoming something more positive after cleaning up their balance sheets.

The data from the latest Banking Outlook of the BBVA showed that lending to Spanish households has risen 21% for this April compared to last April, with the terms offered on these loans being more favourable.

By recovering from such a bad position Spanish banks have become some of the most efficient in Europe. Spain saw a property bubble that led to problems in the construction and real estate sector, but the problems were quite concentrated. These days those problems are gone and everyone is benefiting.

Is Prince’s Unsold Villa in Marbella A Sign of the Times for Homebuyer Tastes?

Is Prince’s Unsold Villa in Marbella A Sign of the Times for Homebuyer Tastes?

Prince, who sadly left us earlier this month from currently unknown causes, was famous for a lot of things. Obviously he was a famous musician, but he was also famous for his flamboyance, his short stature, his love of purple, and for the people of southern Spain he’s famous for the “Prince Villa”.

Back on the market Princes former Villa is back in the headlines  

The Prince Villa can be found in El Paraiso, just west of Marbella, and is valued at €5.25 million. It’s been on the market for years now, even before Prince passed away. He bought the home in 1998 and it was a gift for his wife at the time. He put it on the market in 2006 and it’s been on there ever since.

Bloomberg recently published an article in which they tried to determine why the villa, which manages to be glam, garish and glitzy all at once, is unsellable.

The owner of a local nightclub, Olivia Valere, says that the house is glamorous and luxurious but it’s so flashy it’s become outdated. There’s a lot of truth to that too. Marbella property has always been the height of fashion and tastes. These days homes need to have an understated elegance and so something as flashy as the Prince Villa is easily too brash for its own good.

The property is also valued too high for most people in the region at over €5 million. Now that Prince has passed there is a higher chance that someone will want to buy the home that has been described as the inspiration for some of his later work though.

The property market of the Costa del Sol is doing pretty well and should do even if Prince’s old home isn’t sold though. It currently takes an average of 10.5 months for a Spanish property to sell according to date from Tinsa. The average in Marbella and the Costa del Sol comes down to 9.1 months though and the prices of homes in the region are set to rise by up to 4.3% in 2016.