Spanish Recovery: Key Numbers

IMF News, October 6, 2017

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Spain has been a success story as crisis recoveries go; the economy expanded for the fourth year in a row and “took the right reforms” after the 2008 slump.
Despite healthy growth and regained competitiveness, major challenges remain: high unemployment, low productivity, and high net indebtedness to foreign creditors.

3.3% — Spain’s GDP finally surpassed its pre-crisis level in the first half of 2017.
3.3% — Growth in 2016; Spain grew nearly twice as fast as the euro area average.
Recovery drivers: consumption, investment, and exports.

1.9% — Spain moved from a large current account deficit of 9.6 percent of GDP in 2007 to four consecutive years of surplus, reaching nearly 2 percent of GDP in 2016.
Contributing factors: strong exports including services, a lower energy trade deficit due to low oil prices, and lower interest payments.

4.5% — General budget deficit in 2016.
Fiscal trajectory: deficit is on track to slide under the 3-percent threshold set by the European Union by 2018, enabling exit from the EU’s excessive deficit procedure that has been in place since 2009.
99.4% — Government debt ratio is nearly 100 percent of GDP, almost three times higher than on the eve of the financial crisis.
Policy recommendation: IMF recommends reforms primarily to the tax system to increase revenues, which could serve as a cushion in harder times.

17.2% — Unemployment rate (current), down 10 percentage points from its 2013 peak.
3.9 million — Number of Spaniards without jobs.
Distributional concerns: situation especially dire for low-skilled youths and those out of work for longer than a year.
Policy recommendations: strengthen, better target, and coordinate job search assistance and labor market programs such as training.

25% — Share of all euro area jobs created over the past year that were in Spain, aided by wage moderation and labor market reforms.
79% — Share of Spaniards working in the service sector.
Job quality issue: just over half of the new jobs are temporary, which tend to be less productive and leave workers in uncertainty.
Policy recommendation: reduce costs associated with open-ended job contracts.

8.4% — Ratio of nonperforming loans for bank operations in Spain.
5.5% — Ratio of nonperforming loans when Spain’s banks’ extensive foreign business is taken into consideration.
Policy recommendation: banks should accelerate balance sheet clean-up to become more resilient to shocks and to facilitate the provision of new credit to the economy.

IMF Country Focus — Spanish Recovery: Key Numbers, October 6, 2017