Spain experienced a prolonged recession following the global financial crises. 2013 did show some modest growth, but credit contraction in the private sector, fiscal austerity and high unemployment continued to weigh on both consumption and investment.
Exports from the country, however, have continued to be resilient throughout the downturn, partially offsetting declines in domestic consumption, and helping to bring the country’s account into surplus for the first time since 1986.
Spain gradually recued the deficit to just under 7% of GDP in 2013, exceeding the target negotiated between Spain and the EU. Rising labour productivity, moderating labour costs and lower inflation have helped to improve foreign investor interest in the economy. The government’s efforts to implement reforms – labour, pension, health, tax and education – are aimed at supporting investor sentiment.
Composition of GDP: