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Spain is a country in southwestern Europe bordered by neighboring countries like France, Portugal, and Morocco.
It has the record of being the 14th largest economy in the world which controls the northern territories of Morocco including the Canary Islands and the Balearic Islands. It is one country in the region that has a mixed economy.
The people of Spain were pushed into poverty in the 17th century with their primitive methods of agriculture that could not gain much profit in the international market. The only industries until the 17th century were arms manufacturing in Toledo and Trubia, and glassworks at La Granja. The century started with iron ore refining in the Basque region and the production of colorful paint fabrics in Barcelona.
The very first industrialization phase in Spain started in 1832 with the first steam-propelled cotton factory in Barcelona. This was followed by the establishment of many mechanical looms and soon the Catalonian metropolis became a major textile-producing region. This industrial development further attracted metalworking and chemical industries to the area.
This was the beginning of the economic growth of Spain. However, due to some wrong decisions by the Spanish government, Spain's economy saw minor change. The people of Spain lacked the necessary funds. When the government nationalized the mining rights, they were mainly leased by foreign investors who enjoyed the lion's share of profits. They still overcame the situation and rose to become a flourishing economy as time passed.
If you are interested in more facts about Spain, then you can check out the articles on Spain flag facts and Spain Christmas symbols facts too.
Spain has become one of the largest economies of Europe, its highlands are rich in natural resources. It is also one of the major industrial nations of Europe which implies high economic growth. The industrial growth of Spain was, however, delayed by a century due to the inefficiency of the Spanish government.
In 1800, the port of New Orleans along with the Lousiana territory in the United States, was transferred to France. The Americans did not take this arrangement well, as the American farmers used the port. The situation escalated and there was a demand for war. The port was important for the Mississippi trade.
Some fragmented industries were found in parts of the country that contributed very little to their economy. Spain remained an agrarian country until 1936 when a civil war broke in the country. The effects trickled down into the Spanish economy.
Automobile companies such as Ford and Renault were set up and they were nationalized but due to poor demand and lack of capital, the economic activity was halted. It was not until 1959 that Spain proclaimed the Stabilization Act which made them eligible for financial services assistance. They opened up the markets which allowed financial freedom of foreign investment and the country's economy gradually began to grow through the modernization of the services sector.
The Spanish miracle of the '60s was the turning point for the country's GDP. Automobile companies of Spain played the most significant role in the turning point of the Spanish economy and achieving business freedom. To regularize foreign trade, the government engineered new policies and increased the government-subsidized Spanish exports to stabilize the labor market and reduce the unemployment rate. Currently, the renewable energy sector in Spain is responsible for creating thousands of direct and indirect jobs in many countries.
Spain faced a great recession in its economy in the period between 2008-2014. It's popularly known as the Great Spanish Depression. The source of the financial crisis in Spain was the global financial crisis that took place between 2007-2008. Spain joined the global economic crisis a bit late in 2012 when the government could not bail out the banking sector of the country. The main reason for the financial crisis was the unsustainable higher rate of increase in GDP per capita.
During this time, the property investment and construction sector saw a boom. The government enjoyed a budget surplus even though the government expenditure increased a lot in the financial year of 2007. The government of Spain became reluctant to supervise the ongoing processes of the banking system since they were gaining huge profits.
The banks hid the losses and misled the officials to finance the housing bubble of Spain. This produced a huge downturn in the economy and the results were devastating for Spain. The unemployment rate skyrocketed and various Spanish companies announced bankruptcy.
Some fundamental problems were noticed in the government budget plannings much before the crisis occurred. The economy of the country grew totally based on the real estate bubble of Spain. It had huge trade deficits in the international market, which resulted in a loss of competitiveness against other countries.
The above-average inflation rate also caused an increase in the prices of houses and debt in the private sector grew. The Gross Domestic Product or GDP of Spain contracted for the first time in 15 years in the country during the third quarter of 2008 and the country officially entered recession in 2009. The economy contracted 3.7% in 2009 and in 2012, it again dropped by 1.7%. This was followed by increasing unemployment due to the lack of job creation opportunities in Spain.
Spain has the record of being the 14th largest economy in the world in terms of Gross Domestic Product. The country is also known for having one of the largest Purchasing Power Parities (PPP) in the world market.
After facing many adversities, Spain's economy is now classified as a high-income category economy. They are one of the European Union (EU) members, Organization for Economic Cooperation and Development (OECD) members, and members of the World Trade Organization (WTO).
At the end of the financial year 2021, the Gross Domestic Product of Spain was $1.28 trillion with a purchasing parity of $1.82 trillion. The growth of Gross Domestic Product for the year 2021 was 5.74%. Being a member of the European Union, the country uses Euro as its national currency. The industrial sector of Spain accounts for 20.2% of GDP and total employment.
The manufacturing sector is the most profitable sector in Spain. It alone accounts for around 11% of the country's GDP. The manufacturing sector of Spain includes textiles, iron and steel, industrial food processing, and engineering. Spain holds the rank of the largest production of olive oil in the world, it accounts for almost 45% of this oil in the world.
However, the tourism sector is the main source of income in Spain as it is the second most popular tourist spot in the world. The public debt of Spain is equivalent to 95.5% of the total GDP in 2019 and government spending is 42.07%. The unemployment rate in Spain is 14.1% while the poverty rate is 20.7% in 2019.
20.7% of people live below the poverty line in Spain as per 2018 data. Like all other capitalist countries, Spain is also periled by income disparity. The spending focuses on the wealthiest 10% of the population while the rest of the Spanish citizens live an average life. The disadvantaged groups face high social and political risks. Investment has also decreased significantly since 2010. It's a mixed economy since the country enjoys private freedom along with centralized planning.
The Spanish Miracle is an exceptional economic boom of Spain between the period 1959-1974. This period was characterized by rapid development in all the economic sectors of the country. The open markets of Spain started conducting trade with all the major countries of the world. The economic development of Spain came to an end in the '70s due to the global stagflation and oil crisis.
The rapid economic expansion during the period of the boom gave a new start to the old industrial areas of the country like the Basque country, Ferrol, and Barcelona. The iron and steel industries, shipbuilding factories, cars, petrochemicals, machinery, and textile production were reintroduced during this time.
To increase the rate of development further, government investment increased significantly through the key government-based companies of Spain. The automotive industry was a powerful contributor to the Spanish miracle. The industry grew at a rate of 21.7% in a year. In 1946, only 72,000 private cars were in Spain. By 1966, more than a million cars were found in the country.
This growth rate was not equivalent to any growth rate in the world, it also increased the state revenue. Heavy protection of the domestic market from foreign competition led to the rapid industrialization of the country. It restored the prosperity of the country and also created new economic spaces within the country.
Here at Kidadl, we have carefully created lots of interesting family-friendly facts for everyone to enjoy! If you liked our suggestions for Spain's economy facts then why not take a look at Ireland's economy facts, or Dominican Republic's economy facts.
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