SPANISH ECONOMY

Investing in property in Spain

Following peak growth years in the late 1980s, the Spanish economy entered into recession in mid-1992. The economy recovered during the first Aznar administration (1996-2000), driven by a return of consumer confidence and increased private consumption. Unemployment is at 8.7% (December 2005), which represents a significant improvement from the 80's levels and a better rate than the one of Germany or France. Devaluations of the peseta during the 1990s made Spanish exports more competitive, but the strength of the Euro since its adoption has raised recent concerns that Spanish exports are being priced out of the range of foreign buyers. However, this has been offset by the facilitation of trade among the Euro nations.

The Spanish economy is credited for having avoided the virtual zero growth rate of some of its largest partners in the EU (namely France and Germany) by the late 90's and beginning of the 21st century in a process which started with former Prime Minister Aznar's liberalisation and deregulation reforms aiming to reduce the State's role in the market place. In 1997 Spain started an economic cycle -which keeps going as of 2006- marked by an outstanding economic growth, with figures around 3%, often well over this rate.

This has narrowed steadily the economic gap between Spain and its leading partners in the EU over this period. Hence, the Spanish economy has been regarded lately as one of the most dynamic within the EU, even able to replace the leading role of much larger economies like the aforementioned, thus subsequently attracting significant amounts of foreign investment.