Abdulaziz Al-Naim 200900504 Omar Bubshait 201103097 GDP of Spain Abdulaziz Al-Naim 200900504 Omar Bubshait 201103097
Introduction The economy of Spain is the twelfth-largest economy in the world, the fifth-largest in the European Union, and the fourth-largest in the Eurozone, based on nominal GDP comparisons. Spain is regarded as the world's 23rd most developed country, among the countries of very high human development.
Financial Crisis in Spain Because of the dramatic increase in construction of new homes and the long time between the beginning and end of a construction project, by the time the demand for housing had slowed in 2007, available housing was just reaching its peak. By this time, construction accounted for 13 percent of total employment in Spain. When prices began falling and housing demand halted, unemployment jumped up 10 percent. As unemployment skyrocketed, so did unemployment benefits. In a welfare state like Spain, unemployment benefits are generous. However, what was a sustainable unemployment level quickly became a drain on the Spanish government. The reduction in the Spanish government’s tax revenue, which is heavily dependent on real estate, exacerbated the problem. These drains on the economy turned a previous budget surplus of over 2 percent of GDP into a deficit of almost 4 percent of GDP, violating the limits of the Pact.
Gross domestic product (GDP) : Year GDP (constant) GDP (current) GDP growth (annual%) GDP per capita (constant) GDP per capita growth (annual%) 2001 601,408,697,25.4 608,856,375,838.90 3.7 25,777.10 2.5 2002 617,946,434,914.20 686,295,878,035.00 2.7 26,095.40 1.2 2003 637,037,529,120.40 883,839,729,119.60 3.1 26,459.30 1.4 2004 657,800,500,119.30 1,044,612,070,303.50 3.3 26,882.00 1.6 2005 681,373,742,384.30 1,130,798,885,738.50 3.6 27,392.00 1.9 2006 709,148,044,935.80 1,236,352,163,544.50 4.1 28,044.40 2.4 2007 733,820,614,902.30 1,441,426,534,070.20 3.5 28,527.10 1.7 2008 740,341,770,865.00 1,593,362,873,988.40 0.9 28,353.00 -0.6 2009 712,647,416,141.20 1,455,638,243,339.20 -3.7 27,082.60 -4.5 2010 712,152,291,145.90 1,383,344,736,842.10 -0.1 26,968.40 -0.4
Gross domestic product (GDP) :
Gross domestic product (GDP) :
Gross domestic product (GDP) :
Gross domestic product (GDP) :
Gross domestic product (GDP) :
Household Personal Expenditures (C): Year Household expenditures (annual% growth) Household expenditures (constant US$) Household expenditures (% of GDP) 2001 3.5 358,202,334,302.30 59.1 2002 2.8 367,720,020,417.50 58.3 2003 2.9 377,761,617,059.60 57.6 2004 4.2 393,361,091,611.40 57.9 2005 4.1 409,501,576,167.30 57.8 2006 4 425,968,425,011.40 57.4 2007 441,010,924,129.10 2008 -0.6 438,047,237,214.10 57.2 2009 -4.3 419,519,783,497.90 56.1 2010 0.8 423,546,639,726.60 57.7
Household Personal Expenditures (C):
Household Personal Expenditures (C):
Household Personal Expenditures (C):
General Government Final Consumption Expenditure (G): Year Government expenditure (%of GDP) Government expenditure (annual % Growth) Government expenditure (constant 2000) 2001 17 4 103,418,094,711.60 2002 17.1 4.6 108,135,558,571.20 2003 17.3 4.8 113,324,232,356.70 2004 17.8 6.2 120,372,212,415.00 2005 18 5.5 126,960,423,774.50 2006 132,769,151,888.80 2007 18.3 5.6 140,141,426,259.50 2008 19.5 5.9 148,432,650,034.30 2009 21.3 3.7 153,970,789,880.30 2010 21.1 0.2 154,324,036,550.60
General Government Final Consumption Expenditure (G):
General Government Final Consumption Expenditure (G):
General Government Final Consumption Expenditure (G):
Spain’s Financial Future The future financial position of Spain is unclear. However, some outcomes are more likely than others because of Spain’s current economic position and the purpose and status of the EMU.
Conclusion Spain still remains in a dire financial position. However, the Spanish government are working hard to ensure its recovery and stability. Spain found itself in a unique situation because of its real estate market and the actions of the cajas. When the real estate market collapsed, it brought the entire Spanish economy down with it. While the Spanish government perhaps should have acted sooner, it is acting now and making necessary changes to bring about recovery. Spain still may not see increases in employment or growth for many months, but Spain’s important position within the Eurozone and the resiliency of its government and people suggest that Spain will survive this financial downturn and will hopefully learn from its mistakes. The EMU will also learn from the mistakes made and will change its regulatory scheme to prevent future crises. Cajas: “banking foundations”
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