Spanish Economic Growth Improves in October
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Spain’s economic output grew at one of the fastest rates within the European Union due to stronger consumer spending, according to Reuters. The economy grew .08 percent when compared to the second quarter, and the economy expanded 3.3 percent for 2015.
Prime Minister Mariano Rajoy and cabinet members are banking that the good news will help them win the general election in December. However, the International Monetary Fund expects the economy to recede to 2.5 percent in 2016.
Spain’s economic output grew at one of the fastest rates within the European Union due to stronger consumer spending, according to Reuters. The economy grew .08 percent when compared to the second quarter, and the economy expanded 3.3 percent for 2015.
Prime Minister Mariano Rajoy and cabinet members are banking that the good news will help them win the general election in December. However, the International Monetary Fund expects the economy to recede to 2.5 percent in 2016.
A busy tourist season that created jobs and grew local economies bolstered the economy, with tourist income growing 3.0 percent compared to 2014. Moreover, Spain enjoyed some its fastest growth rate since the 2007 crash. To Spain’s credit, the government has implemented certain structural reforms within the job market, which is something that many countries in the EU failed to do.
The Real Situation
The structural reforms may be a step forward, but it is not enough when it comes including more people in the economy. For example, the government relaxed certain labor laws, which allowed employers to fire employees under dire economic circumstances, while reforming probation periods and compensation for workers. Such changes placed many workers in the awkward position of struggling to find stable employment for the remainder of their lives.
Critics also note that government efforts have done little when it comes to wages. From 2007 to 2012, wage inequality in Spain surpassed all EU nations. Spain has quite a bit of work ahead in recovering from those lost years, but the political establishment remains somewhat tone-deaf to the true suffering going on in the country.
Political Dissatisfaction
Rajoy and members of his party may be feeling confident as elections draw near, but an undercurrent of dissatisfaction stirs among the populace. Rajoy made the mistake of downplaying the economic crisis over the years, and many people do not share the prime minister’s optimism.
With limited job opportunities and high unemployment, many Spaniards do not feel the benefits of a growing economy. Spain’s unemployment rate remains over 21 percent, surpassing Greece’s jobless rate. The situation is forcing many people to accept part-time or low-paid positions, and the black market economy in Spain flourishes as people make money in secret to survive.
Further, opposition movements are gaining momentum, most notably the independence drive in Catalonia, and the opposing Socialist Party gained traction in the polls. Further, the PP, mired in political scandals that damaged the reputation of the party, did not win over any voters. According to recent polls, the amount of people uncertain or unwilling to vote has increased.
