Spain Stimulus Package
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About Spain stimulus package
On 18th April 2008, Spanish government had decided on a Spain stimulus package worth about 18 billion Euros. Primary aim of this Spanish stimulus package was to maintain a certain semblance of economic expansion, which has been hit hard by credit crunch and declining housing market of Spain.
On 14th August 2008, Spanish government had pledged a stimulus package worth 20 billion Euros. Main purpose behind this was to deal with problems of an economy that had been cooling down.
This Spain stimulus package is supposed to be providing tax cuts on an emergency basis. According to this Spain stimulus package, there would be a provision of tax rebate worth 400 Euros to every pensioner and worker. This amount is a part of outlays worth 10 billion Euros being provided in financial year 2008. Remaining 8 billion Euros would be spent in financial year 2009.
Jose Luis Rodriguez Zapatero, Prime Minister of Spain has been making provisions for a budget surplus that would be employed as a buffer against effects or impact of Spanish economy that had suffering a downturn. As per predictions of International Monetary Fund, rate of economic growth would come down to 1.8 percent in financial year 2008. This deduction would be more than 50 percent less compared to financial year 2007.
Situation of housing sector in Spanish economy has been extremely deplorable of late, as prices of housing properties have been falling in real terms. This is first time in a span of ten years that Spain’s housing sector has suffered such a plight. In previous decade, housing sector of Spain had been in a better situation as it had grown to become three times as large.
Deputy Prime Minister of Spain, Maria Teresa Fernandez de la Vega had opined that Spain’s national government had followed a fiscal and budgetary policy that had enabled them to collect a surplus form public accounts. As a result of this, Spanish government is now able to introduce Spanish stimulus packages like this, that help to boost economy, assist households and individuals in times of financial crisis and revive job market.
