Spain To Fail

After a period of active growth between 2013 and 2019, Spain experienced the worst single-year economic fall. Together with France and Italy, Spain has been losing positions in the club of the biggest economies after the introduction of the Economic and Monetary Union. In this blog, I recommended France, Italy, and Spain to leave the EU as Germany squeezes them as a piton. The 2020 COVID-19 pandemic for Spain was much worse even than for France and Italy. Figure 1 demonstrates that the real GDP per capita has been growing at a relatively good pace before the Great Recession. Between 2008 and 2013, Spain fell back to the 2001 level. In 2019, real GDP per capita in Spain was $38,128 (constant 2015 US dollars) as reported in the OECD database. In 2020, the COVID-19 pandemic dramatically reduced the Spanish economy. The curve in Figure 1 fell to $33,750, i.e. by $4,379 (see Figure 2).

This fall is larger than in France, Austria, but it is lower than in the UK ($4,538). In relative terms, the fall in the real GDP per capita was 13.0%, i.e. worse than in the UK with 11.6% (see Figure 3). The COVID-19 pandemic in 2021 is still far from normal with the third wave coming before the end of the second wave. The slow growth rate together accompanied by an extremely high unemployment rate (16.3%) indicates that the Spanish economy has clear long-term economic and social problems. 

Figure 1. Evolution of real GDP per capita in Spain according to the OECD database.

Figure 2. Evolution of real GDP per capita in Spain according to the OECD database. The 2020 fall is $4,379 (constant 2015 US dollars). 

Figure 3. Evolution of the growth rate in real GDP per capita in Spain according to the OECD database. In 2020, the overall fall is 13.0%, which is much larger than in 2009 – 5.0%.

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