Tuesday, February 13, 2018

Spain’s Surprising Growth

Spain’s Surprising Growth

Written by: Payton Wolf

Spain was one of the countries that was most affected by the eurozone crisis, which brought it's economy to the brink of collapse. Unemployment rose as industrustries could not pay minimum wage for its employees during the recession. However, over the last couple of years, Spain has managed to increase its GDP and recover from this disaster. In 2014, it's economy grew 0.6% and 0.6% in the second and third quarters of the fiscal year, respectively. Why that may not seem like a large growth, in reality, this is an increase of several million dollars in some cases. Spain was able to recover because it focused on increasing the amount of goods it exported.

Exports are one of the factors that contributes to a country's Gross Domestic Product, along with consumer spending, investment spending, and government spending. Exports improve the GDP because Spain produces new goods within the borders of the country. The goods that are produced 2014 contributed in the economic growth recorded during that year. If the goods had been produced in a different country, for example France, they would not have been included in Spain’s GDP, so they focused on loyal, sometimes family run businesses to produce within the country. Specifically, Spain focused it's manufacturing efforts in pharmaceuticals, automobiles, capital goods, and more. These industustries are centered around exporting their goods to other countries, increasing Spain’s total GDP.

Producing exported goods within the country also increased the employment rate, and the number of people in the workforce. During a recession, it is common for people to give up looking for a job because there are simply no jobs out there. At this point, these disgruntled people are no longer considered unemployed, nor are they a part of the workforce. However, using local businesses and industries allows more local citizens to find jobs, increasing the employment rate. Increasing the amount of exports in a country is a very effective way to not only increase the GDP of a country, but also increase the amount of citizens who have jobs and are able to provide for their family. Spain is likely going to continue growing economically due to this decision, possibly surpassing other large European nations.


Works Cited
“Economic Forecast for Spain.” European Commission - European Commission, 7 Feb. 2018, ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-performance-country/spain/economic-forecast-spain_en.

Monaghan, Angela. “Spain's Economic Recovery Gathers Momentum.” The Guardian, Guardian News and Media, 30 Oct. 2014, www.theguardian.com/world/2014/oct/30/spain-economic-recovery-growth-quarter.

2 comments:

  1. After hearing about what happened to Spain I figured it would take them a lot longer for them to build themself back up, It sucked to hear when they had so little money they could not even afford to pay people the bare minimum and due to that lots of people lost their homes and jobs. It's never easy just to turn a blind eye on something like that, and it sucks when something happens like that and we know we cant do anything, it takes a toll on people. But to hear now that they are building the economy back up and people are getting there jobs back is great. At the end of the day it should not matter what jobs any one get but even if its exporting goods that better than nothing and if that is what is helping Spain they should do whatever it takes to build themself back up.

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  2. It is great to see Spain making impressive strides towards improving their economy. This post, with its focus on Spain’s GDP, caused me to think about the Catalan independence movement that occurred near the end of 2017. Catalonia, the northeastern region of Spain, desired and fought for independence from Spain; though separation did not occur, the Catalans will likely continue fighting for independence in the future. If Catalonia did become a new European nation, the separation would greatly impact Spain’s economy, which is something I find very interesting. After doing some research, I found that Catalonia generates about 20% of Spain’s GDP and 25% of its exports. Evidently, Spain’s GDP would suffer significantly if it no longer consisted of Catalonia’s high levels of production and tourism. Spanish government officials and policy makers will need to make intelligent, careful moves when dealing with Spain’s economy if Catalonia does secede, or else Spain could face another economic downturn similar to that caused by the eurozone crisis.

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