Economic trends
Spain has achieved an economic leap in the last two decades and has risen to be amongst 20 of the world's most significant economies. It registered annual GDP growth rates higher than 4% between 1997 and 2000 and thereafter a growth rate that is always higher than the average in the Euro zone due to consumption and to the real-estate "boom". Nevertheless, the growth factors, which were at the root of its economic growth have been weakened by the financial crisis, which touched the real-estate sector and weakened the banking system. Unemployment raye passed from 20% in 90's to 8.3% in 2007. However, the number of unemployed people reached the symbolic threshhold of 3 milions and has continued to climb in 2009.
The Spanish budget, which is usually in surplus, showed a deficit because of the international crisis. In 2008, the crisis (characterized by the real-estate "subprime lending", the increase of the euro in relation to the dollar and the increasing oil prices and certain food products) affected Spain by considerably slowing down the construction sector and to some extent consumption. GDP growth decreased in 2008 and is expected to remain negative until 2011. Inflation has also followed the same path, but the tendency should remain tempered during the years to come.
Many companies are in trouble or are closing down (+43% in relation to the 1st quater in 2007), especially in real-estate, construction and public works sectors. Outstanding debts of companies as well as families have increased by 12% in figures but by 61% in value.
Since 2009, Spain is going towards a different economic model by trying to be more competitive, better added value on services and on freeing itself from its historical growth factor and real estate. With a net benefit quarterly growth of 22.4%, Santander, the first Spanish bank that seems to reflect the country's ambition to resist economic decline. Finally, even though the European Commission reviewed Spain's growth predictions for 2009 on a downward trend, the country maintains figures higher than what was predicted for the entire Euro zone.
Main branches of industry
Agriculture contributes around 3% of the Spanish GDP. The country produces wheat, sugar beet, barley, tomatoes, olives, citrus fruits, grapes and cork. It is the world's largest producer of olive oil and the world's third largest producer of wine. It is the largest producer of lemons, oranges and strawberries. Spain has limited mineral resources.
The manufacturing industry is dominated by textiles, industrial food processing, iron and steel, naval machines and engineering. The new sectors such as relocation of the production of electronic components, information technology and telecommunications provide a high growth potential.
Tourism represents Spain's largest source of income, having become the second tourist destination of the world and thereby stimulating export of goods and services. The tertiary sector contributes to 2/3 of the GDP.
International trade
The Spanish trade deficit, which reached high record in 2007, increased in 2008 and 2009.
The energy bill reached EUR 41.8 million, which is almost 15% of the total imports. Nevertheless, its burden decreased because of the drop in Brent future price and the incerase in the production of renewable energy. Other factors are responsible for the decline of foreign trade: apart from food products (e.g.: fruits and vegetables) whose balance remains in surplus, there is a negative balance for other items, which shows that Spain is loosing its competitiveness.
The main trade partners are the countries of the European Union.
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