One of the main engines of Spanish economy in the past, now tourism in this country faces fierce competition from Eastern Europe countries. The beautiful resorts in Palma del Majorca and Costa Brava must compete with low cost sea side resort, which offer similar services at incredibly low prices. Another field which needs reforms and reformulation policy is the agricultural and fishery one, which accounts only 4.1% out of GDP, although the important political forces attached to this sensible sector.
In order to be able to face the challenges and the opportunities on the regional and global market, Spain needs reforms in most fields of activity. Unemployment level is one of the highest in EU 9.2% at the end of 2005, while the rate of inflation was around 3.4 per cent in 2005, which is also higher than the EU average.
The Gross Domestic Product (GDP), computed at current prices, and PPP (purchasing power parity) for 2005 was $1.125 billion with a real growth rate of 3.4% as regards to 849.3billions in 2000. GDP per capita in 2005 was approximately $25,500. The GDP dollar estimates presented here are calculated at market or government official exchange rates. The GDP values in the national currency (Euro) show that the GDP computed for constant and current prices had the same value in 2000 (630.263 billions) while in 2005 the GDP (constant) was 735.924 billions and the GDP (current) 904.323 billions in 2005. The GDP/capita at national currency had the same value for 2000 computed for constant and current prices, 15,708.792 Euros, while in 2005 in GDP in constant prices was 17,785.003 and the one in current prices was 21,854.677. The implied PPP conversion rate was in 2000, 0.743 and in 2005, 0.818.
The social inequality has improved in the last decades, but is still at important quotas. This means that a big part of country's wealth is concentrated in the hands of a very small percentage out of the total population. These social and economic phenomena enable social tensions among different groups of individuals, but reduce on the whole the purchasing power of average individual. Also, companies may want to target the prosperous group of Spanish people with premium products at accordingly settled prices in order to rip off the benefits of the current situation.
If we discuss about the structure of the GDP, agriculture accounts for around 4% of GDP, mainly in the form of wine, olives, fruit, vegetables and rice. Industry accounts for 29.5% of GDP with the main industries being processed foods, textiles, footwear, petrochemicals, steel, automobiles, consumer goods and electronics.
Spain's fishing fleet, the largest in the EU, is another important contributor. Services make up the remaining 66.5% with retailing, tourism, banking and telecommunications all making a crucial contribution to economic activity.
Tourism is of particular importance with over 50 million visitors a year injecting some $25 billion into the economy. The purchasing power is influenced only to a small amount by the inflation rate, as in the last 5 years, due to community programs of monetary stabilization, as the inflation is around 3.4%. per annum. Even if Spain's inflation registers a moderate depreciation, it continues to be the highest among the countries adopting the EURO currency.
IV. Trade and Investment Opportunities existent on the Spanish market are considered by specialists and investors as being quite important. Due to the fact, that Spain is a member in the European Union, this thing assures the investors of the relative economic stability of the country. The main flow of investment comes from the EU countries, and is the result of Spain's struggle to attract new FDI funds in order to permit the modernization of its economy. In the 1990's it introduced new legislation to...
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