November 23, 2010World Marketsby EconomyWatch

Spain Market

The Spain Market follows the mixed economic model. This model has especially been successful as the country enjoys particularly high levels of Gross Domestic Product (GDP) which measured on a per capita basis, is about 90% of the leading Western European countries such as the UK, France and Germany and is slightly lower than the European Union average. This makes Spain rank 22nd according to the GDP per capita on a worldwide basis. As of 2005, the absolute GDP of Spain was at US $1.12 trillion, just behind Italy and ahead of Canada.

Some of the other features for the Spanish economy vis-à-vis the Spain markets can be summarized as being one of the first countries to launch the Euro way back in 1999 and an improvement in the unemployment rate which climbed over 20% in the early 1990’s and was pulled back to 7.6% in October 2006, a rate which compares favorably to many other European countries for the same period. The perennial weak points of the Spanish markets include a large parallel economy, high inflation, low productivity of labor and one of the lowest rates of investment on research and development among the developed countries of the world. However, over the five years ending 2005, Spain has created more than half of the new jobs in the EU and is now being regarded as being one of the most dynamic within the group attracting significant amounts o foreign investment. Some of the factors contributing to the growth of the Spanish economy in the recent years are the global real estate boom and the spurt in the Spanish tourism industry.

Some of the key Spain markets will be:

Trade in goods and services:

Spain’s foreign trade grew rapidly in the late 20th century. The long-established pattern of imports weighing out the exports and the resultant trade deficits continued though tourism balanced a significant share of the mismatch in trade in tangible goods. By the late 20th century the imports of Spain ranged from machinery, electrical equipment, motor vehicles, chemicals and petroleum products and base metals. Some Spanish exports also occurred in the fields of motor vehicles, machinery and electrical equipments, iron products, clothing and footwear.

Capital markets:

Some of the leading banks and financial institutions in Spain offering advice on mergers and acquisitions, corporate finance and equity capital markets include the Royal Bank of Scotland Group and Caylon. The Bolsa de Madrid (Madrid Stock Exchange) is the largest and most important of all stock exchanges in Spain. It deals with trading of shares, convertible bonds and fixed income securities and debts for both the government and private sector. The derivatives markets also come under its umbrella. Trading is linked through the Spanish Stock Market Interconnection System (SIBE) which handles 90% of all transactions. The Madrid Stock Exchange General Index (IGBM) is the exchange’s principal index.

Labor market:

Since the accession to the European Community, there has been a high creation of new jobs during the periods of greatest economic expansion. This was particularly experienced during the period of 1986 to 1990 with almost about 398,000 on a yearly average. Participation of women in the labor force has also increased over the years. But a general problem with the Spanish economy lies in the fact that with increased job creation, there has been a rise in the wage levels with no associated increases in labor productivity and rising labor costs. This has provoked a gradual loss of Spanish products’ competitiveness.

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