Spain Overview

Capital City: Madrid

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Spain's economic growth has been accelerating since 2004. GDP growth rate was 2.4% in 2003, 3.1% in 2004, 3.2% in 2005. The IMF forecasts a 3% growth in 2006. This growth is carried by a sustained domestic demand, weak interest rates and by a good level of investments concerning infrastructures and housing. The growth contributes to the drop of the unemployment which is 8.5% in 2005 whereas it was 10.5% in november 2005. Today, the Spanish economy has to face several challenges. First, the real estate boom has provoked households strong debt and created a real estate bubble. Over the last ten years, European structural funds granted to Spain have widely contributed to the economy's dynamism but will now falter due to the ten new EU members which will benefit from it.

Spain holds some mining resources, but their exploitation is little developed. The country has imposed itself as a huge agriculture power and mainly exports wine (third largest producer in the word), fruits and vegetables and olive oil (world's top producer). The manufacturing industry has developed especially in textile, food-processing, iron and steel, mechanical building and naval engineering sectors. Tourism is in full swing, given that Spain has become the world's second tourist destination, which stimulates its goods and services exports.

Spain's top three export partners are France, Germany and Italy. Its top three import partners are Germany, France and Italy. Its major imported products are capital goods, manufactured products, automobiles, energetic and food products. Markets with a strong potential are environment, especially waste recycling and water treatment, as well as food-processing, electrical and electronics subcontracting and technological products in computing and telecommunications sectors.