Spain Economy

Spain's economy is the third largest in the world, fifth largest in the European Union and and fourth largest in the Eurozone based on nominal comparisons. It was on a path of economic growth predicted to overtake Germany before the global recession reversed the process and left Spain with an unemployment rate of nearly 25%.

The banking system of Spain is often cited among the most solid of all western banking systems coping with the worldwide liquidity crisis, in part due to the conservative banking rules and practices it upholds. This move has helped a Spanish economy that was highly dependent on the real estate sector weather deflation better than was originally expected, and allowed these banks to buy up distressed assets across Europe and the United States.

Spain must import all of its fossil fuels due to a lack in natural resources, and this does not affect its inflation rate favorably. It is however, the second biggest foreign investor in Latin America outside of U.S. interests. Spanish companies have also expanded into emerging markets in China and India.

The ongoing employment crisis in Spain has stymied its economic recovery in recent times, shedding 1.2 million jobs in one year by 2009 as the recession took hold. In May 2012, radical labor reform took place in order to restructure the labor market to make it more flexible and facilitate layoffs.