New Year Looks Positive for Spain’s Economy
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Spain’s unemployment level just experienced its sharpest, most impressive drop since the country began using the euro. Experts suggest that the drop is further evidence that the country is finally beginning to turn around. That is, unless they are not counting those who have just given up looking for work like U.S. data does to underestimate reality.
Spain’s unemployment level just experienced its sharpest, most impressive drop since the country began using the euro. Experts suggest that the drop is further evidence that the country is finally beginning to turn around. That is, unless they are not counting those who have just given up looking for work like U.S. data does to underestimate reality.
Between December 2013, and December 2014, almost 235,000 people found jobs, amounting to a joblessness decrease of approximately 5.39%. This is the biggest fall since the country joined the Eurozone, according to numbers released by the government. Monthly jobless claims fell by around 64,405 for the final month of the year, reflecting the largest decrease in December on record.
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The Job Market
As unemployment fell, the number of people who have registered themselves as “in work” rose by approximately 417,000, which amounts to the first annual increase the country has seen since 2007. Recently, the Spanish economy has undergone a series of labor reforms designed to stimulate growth after years of recession in an effort to boost its competiveness among its neighbors.
Although Spain’s economy grew for the very first time in more than two years during 2014 and forecasts are for it to grow by 1.6% this year, unemployment remains stubbornly high. The deputy minister of labor, Engracia Hidalgo, said that the numbers support the idea that the country’s labor market reforms are working. The biggest improvement in employment came in the service sector, where 65,275 people gained jobs.
Concerns to Consider
Spain’s unemployment, at 23%, taints the reassuring numbers about job growth. Professor of economics, Antonio Argandona, suggested that 2015 brings with it a reason for optimism, however guarded. Spanish economic growth will depend on a number of different factors, including oil prices and the recovery of other European countries.
If oil prices start to rise again, then the Spanish economy could lose its competitive edge. Spain, like America, benefits from low oil prices. America is using shale to compete with OPEC. This indirectly has helped Spain and other European countries because Saudi Arabia, the biggest oil producer in OPEC, has flooded the market with oil, lowering oil prices for everyone.
Sellers need Buyers
What’s more, Spain will need to be aware of geopolitical stability and a nascent European recovery, as these factors could have a significant impact on its growth. If Europe’s recovery stalls, Spanish exports will suffer and this is one of the key elements in Spain’s recovery plan.
