Although Spain is technically a sovereign nation it has progressively developed and transferred power towards it’s 17 ‘autonomous communities’ in great likeness to a federal nation such as the United States, Argentina, and Australia among others.
Giving individual communities an increased amount of power gives plenty of economic advantages such as a better distribution of resources where each local government is able to address local issues directly that often differ in each area of the country. It also allows for a larger increase in citizen participation as a local government are closer to the level of the general population then a centralised national government making people feel more connected towards the government and decisions made. When moving or making an investment into Spain it is just as important to look as individual autonomous community developments as well as looking at the Spain economy as a whole.
Spain also has the fortunate advantage of geography in its power being a tourism and trade hub. Spain often ranks 2nd in the global travel destination with over 100 million international visitors in 2022 and returning to pre-covid levels in 2023 and is likely to continue growing. Alongside Spain’s strong tourism industry, it has outstanding trade capabilities as it benefits from its geography as well as having a strong relationship with OEI nation’s leading the World Bank calling Spain ‘One of the easiest countries to trade with’.
Both of these industries being heavily effected due to covid Spain has bounced back having an annual GDP growth rate between 7.2% and 1.8% since 2nd quarter of 2021. However, despite the strong impact the pandemic had on the Spanish for economy, its growing influence within the EU post-Brexit has opened the door Spain stronghold within Europe despite its previous struggles after the 2008 Financial Crisis. Spain managed to keep its inflation lower the Euro Zone average while maintaining a higher annual GDP growth rate since 2021. The Spanish house index YoY average also remains strong just under 4% since 2014 and managing to maintain over a 3.5% growth in the past two years outperforming majority of the countries in Europe.
The Spanish Economy still has plenty of concerns such as the high unemployment rate in particular with in the youth population coincided with a skill shortage in many industries, and a regional economic divide highlights that Spain still has to address many issues before it can become a European powerhouse, however it has all the foundational ingredients to achieve this growth in the long-term. It is important to understand the differences in individual Spanish autonomous communities and their individual economy before investing in Spain or thinking about moving there.
(Understanding the Spanish economy can be complicated. So, we have attempted to give a short, simplified overview of the current Spanish economy so that you can have a basic understanding before making an investment. Written by Nicholas Wiciak)
