Spanish Economy

spanish economy

Spanish Economy

Facts and Figures

The Spanish economy is one of the fastest growing economies in the European Union. The GDP for the year 2007 was around $1.361 trillion, with an expected growth rate of 3.4%. The tourism, industry and agriculture play a major role in the Spanish economy. Agriculture accounts for around 5% of the GDP, which is mainly composed of crops like wine grapes, olives, fruit, vegetables and rice. The manufacturing industry accounts for 17.3% of the GDP, with the main industries being processed foods, textiles, footwear, petrochemicals, steel, automobiles, consumer goods and electronics. The service industry makes up the remaining 65%, with retail, tourism, banking and telecommunications all making a crucial contribution to economic activity.

Manufacturing Industries

The manufacturing industries of Spain produce textiles and apparel, foods, beverages, metals, metal products, chemicals, ships, automobiles, machine tools, clay, refractory products, footwear, pharmaceuticals, and medical equipment. Industries concentrated in the regions of Madrid, Valladolid and Catalonia are mainly large textile, automotive parts, and electronic product manufactures.

While the mining industries are concentrated in Valencia, Asturias and the Basque Country as they are close to the rich mineral resources of the Cantabrian Mountains where iron, coal, and zinc is found in abundance.

Copper is mined extensively at Rio Tinto, while other mineral resources that drive the Spanish economy include lead, uranium, silver, tin, and mercury. Petroleum is found near Burgos. Unfortunately, many of these industries are still dependent on foreign investments.

Food Indsutry

Spain produces large crops of wheat, barley, vegetables, tomatoes, olives, sugar beets, citrus fruit, grapes, and cork. Spain is the world’s largest producer of olive oil and Europe’s largest producer of lemons, oranges, and strawberries.

Agriculture contributes less than 5% of the nation┬┤s GDP, which is high compared to other countries in Western Europe. Fishing is another important sector for the Spanish economy. Spain is considered the biggest fish supplying nation in Europe.

Tourism

Tourism has played a major role in the Spanish economy since the 1960s. During the last forty years, it has been the fastest growing economic sector of the country┬┤s GDP, helping to accelerate growth. Over 50 million tourists flock to Spain each year, contributing almost $50 billion USD to the Spanish economy. The most popular resort areas are the Balearic Islands and the Mediterranean coastal areas. The tourist boom is a welcome source of foreign exchange, creating new employment opportunities, but it also diverts capital investment away from more fundamental activities as observed by some economists.

Final Thoughts and Resources

The Spanish economy, similar to other economies across the world has, been heavily hit by the recession. The Spanish government has lowered its forecast for national GDP growth for 2008 and the following year to 3.1 pct from its previous target. Unemployment rates have also risen as a result of the recession, climbing to 37%, one of the highest in the history of Spanish economy.