MACROECONOMIC PROFILE OF SPAIN

MADE BY:-
Parth Tandon M199BBA160
Shaurya Sharma M19BBA079
Arsha Agarwal M19BBA157

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 Table of Contents
1. Introduction 3
1.1Quantitative analysis of macroeconomic trends in
the country
a. Population 4
b. GDP 8
c. Economic statistics 9
d. Income Distribution 9
e. Export and Import 10
f. Balance of Trade 12
g. GDP deflator 13
h. Economic Reforms 14
1.2 Impact and recommendation on 16
macroeconomic policy changes

1.3 List of sources. 18

2
Introduction
The detailed analysis of the economic profile of Spain gives
us a look into how the economy of Spain works. In this report
we shall be going through some of the statistics of the factors
which shows the current status of the economy of Spain.
The objective of this group assignment is to successfully
sketch and analyse a country’s economic profile, along with
being able to understand how the economy works.
Economically, Spain is a developed country with with a high
per capita GDP, a long expectancy rate and low infant
mortality rate.
The projected median age of Spain in 2020 is 44.9 years
which is a risk factor for Spain as it shows that the majority of
its population will be old which will lead to less employment
which will affect the GDP of the country.

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1.1 Quantitative analysis of macroeconomic trends
in the country
(a) Population :
 The current population of Spain is 46,739,784 as of Saturday, August 31, 2019,
based on the latest United Nations estimates.
 Spain population is equivalent to 0.61% of the total world population.
 Spain ranks number 30 in the list of countries (and dependencies) by population.
 The population density in Spain is 94 per Km2 (243 people per mi2).
 The total land area is 498,800 Km2 (192,588 sq. miles)
 80.1 % of the population is urban (37,415,111 people in 2019)
 The median age in Spain is 43.0 years.

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Population of Spain (2019 and historical)
Yearly Urban C
% Yearly Migrants Median Fertility Density Pop Urban
Year Population Change Change (net) Age Rate (P/Km²) % Population W

2019 46,736,776 0.09 % 43,918 40,000 43.0 1.33 94 80.1 37,415,111

%

2018 46,692,858 0.10 % 45,430 40,000 43.0 1.33 94 79.8 37,267,072

%

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 Yearly Urban C
% Yearly Migrants Median Fertility Density Pop Urban
Year Population Change Change (net) Age Rate (P/Km²) % Population W

2017 46,647,428 0.03 % 13,288 40,000 43.0 1.33 94 79.6 37,120,403

%

2016 46,634,140 -0.08 % -37,786 40,000 43.0 1.33 93 79.3 37,003,839

%

2015 46,671,926 -0.11 % -51,818 -104,088 42.5 1.33 94 79.1 36,933,458

%

2010 46,931,015 1.29 % 582,378 454,770 40.0 1.45 94 78.2 36,702,035

%

2005 44,019,123 1.52 % 638,874 581,642 39.1 1.28 88 77.3 34,028,496

%

2000 40,824,754 0.52 % 207,467 186,214 37.6 1.19 82 76.4 31,194,106

%

1995 39,787,419 0.30 % 116,979 63,854 35.5 1.28 80 76.1 30,259,317

%

1990 39,202,525 0.24 % 93,730 -13,536 33.4 1.46 79 75.6 29,617,580

%

1985 38,733,876 0.54 % 207,136 -8,658 31.6 1.88 78 74.4 28,821,455

%

1980 37,698,196 0.99 % 363,797 15,381 30.4 2.55 76 73.0 27,511,836

%

1975 35,879,209 1.15 % 399,092 19,398 29.9 2.85 72 69.8 25,028,014

%

1970 33,883,749 1.06 % 347,497 -29,187 29.8 2.84 68 66.2 22,440,001

%

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 Yearly Urban C
% Yearly Migrants Median Fertility Density Pop Urban
Year Population Change Change (net) Age Rate (P/Km²) % Population W

1965 32,146,263 1.12 % 348,770 -101,007 28.6 2.53 64 61.5 19,756,731

%

1960 30,402,411 0.92 % 270,803 -91,005 29.2 2.70 61 56.7 17,246,904

%

1955 29,048,395 0.69 % 195,732 -101,007 28.6 2.53 58 54.4 15,792,936

%

: Worldometers (www.worldometers.info//)
, Department of Economic and Social Affairs, Population Division. World Population Prospects: The 2019 Revision.

Spain Population Forecast

Yearly Urban
% Yearly Migrants Median Fertility Density Pop
Year Population Change Change (net) Age Rate (P/Km²) % Urban Population

2020 46,754,778 0.04 % 16,570 40,000 44.9 1.33 94 80.3 % 37,543,537

2025 46,577,094 -0.08 % -35,537 40,000 47.3 1.33 93 81.6 % 37,995,950

2030 46,230,140 -0.15 % -69,391 40,000 49.6 1.33 93 83.1 % 38,419,742

2035 45,780,170 -0.20 % -89,994 40,000 51.4 1.33 92 84.7 % 38,784,560

2040 45,224,891 -0.24 % - 38,868 52.6 1.33 91 86.4 % 39,069,987

111,056

2045 44,536,596 -0.31 % - 38,931 53.2 1.33 89 88.0 % 39,194,161

137,659

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 Yearly Urban
% Yearly Migrants Median Fertility Density Pop
Year Population Change Change (net) Age Rate (P/Km²) % Urban Population

2050 43,637,410 -0.41 % - 39,020 53.2 1.33 87 89.5 % 39,072,958

179,837

: Worldometers (www.worldometers.info//)
, Department of Economic and Social Affairs, Population Division. World Population Prospects: The 2019 Revision.

(b) GDP

 Nominal GDP (2018) $1.425 trillion (Current US Dollars)

 GDP as per PPP $1.864 trillion (2018)
 GDP growth rate (2018) : 2.5%
 Nominal GDP rank in 2018 : 13th
 GDP rank as per PPP(2018) 15th
 Real GDP (constant, inflation adjusted) of Spain reached $1,509,745,872,740 in
2017.

GDP in different sectors (2017)

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Agriculture sector Industrial sector Service sector

(2.6%) (21.67%) (66.11%)

Spain: Distribution of gross domestic product (GDP) across economic sectors

from 2007 to 2017

SOURCE:STATISTA.COM

(c) Economic statistics

 Household income or consumption by percentage
share:
lowest 10%: 2.8%
highest 10%: 25.2% (1990)
 Inflation rate (consumer prices): 2.6% (2003 est.)
 Labor force: 17.1 million (2001 est.)
 Labor force - by occupation: services 64%,
manufacturing, mining, and construction 29%, agriculture
7% (2001est.)
 Unemployment rate: 7.6% october 2006
 Industrial production growth rate: 0.6% (2003 est.)
 Electricity - production: 222,500 GWh (2001)
 Electricity - production by source:
fossil fuel: 50.4%
hydro: 18.2%
nuclear: 27.2%
other: 4.1% (2001)
 Electricity - consumption: 210,400 GWh (2001)
 Electricity - exports: 4,138 GWh (2001)
 Electricity - imports: 7,588 GWh (2001)

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(d) INCOME DISTRIBUTION
 According to the National Institute of Statistics (INE),the
salaried population in 2017 was 15,682,300 people.
 The INE report indicates the median salary in Spain in
2017, which stood at 1,590.3 euros, 4.2 euros less than the
previous year.
 10.2 million people live below the poverty line, equivalent to
a poverty rate of 22.3 percent.
 This makes Spain the third country in the European Union
with the highest levels of inequality.

(e) Export and Import

 Spain is the 16th largest export economy in the world
and the 28th most complex economy according to
the Economic Complexity Index (ECI).
 Exported $296B and imported $332B, resulting in a
negative trade balance of $35.7B in 2017.

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 The top export destinations of Spain
are France ($40.5B) Germany ($33.9B), Portugal ($2
4.2B) etc
Top Import Origins
 Germany ($43.5B
 France ($37.6B)
 China ($28.6B)
 Italy($23.3B)
 The United States ($14.9B)

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Balance of trade

The Spanish trade deficit narrowed to EUR 2.49 billion in July 2019 from EUR 3.25 billion in the same
month of the previous year, as exports rose 3.8 percent and imports increased at a softer 0.6
percent.

Exports went up 3.8 percent over a year earlier to EUR 25.29 billion in July, driven by higher sales of
food, beverages and tobacco (10.5 percent); chemicals (8.7 percent); equipment goods (5.8 percent);
manufactured consumption goods (10.3 percent); and the automotive sector (5.7 percent). Meanwhile,
sales dropped for energy products (-10.2 percent); non-chemicals semi-manufactures (-2.7 percent); raw
materials (-23.1 percent); and other products (-17.3 percent).

Among major trading partners, sales rose to the Euro Area (4.4 percent), of which France (7.7 percent),
Germany (6.9 percent), Portugal (5.4 percent) and Italy (2.9 percent); and the US (0.4 percent). In
contrasts, sales fell to China (-3.8 percent).

Imports advanced 0.6 percent year-on-year to EUR 27.77 billion, boosted by higher purchases of
chemical products (10.4 percent); manufactured consumption goods (9.1 percent); food, beverages and
tobacco (3.9 percent); and equipment goods (2 percent). On the other hands, purchases fell for energy
products (-14.1 percent); raw materials (-19 percent); and non-chemicals semi-manufactures (-1 percent).

Among major trading partners, purchases increased from China (14.4 percent), but went down to the Euro
Area (-1 percent), in particular Germany (-2.2 percent) and France (-8 percent); and the US (-1.4 percent).

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Considering the first seven months of the year, the country's trade shortfall decreased to EUR 17.20
billion from EUR 17.83 billion in the corresponding period of 2018, as exports advanced 2 percent to
EUR 172.70 billion and imports rose 1.5 percent to EUR 189.89 billion.
Source: https://tradingeconomics.com/spain/balance-of-trade

GDP Deflator:

Foreign Direct Investment

9th largest host for FDI in the world in 2018
FDI inflows amounted to USD 43 billion(2018), representing an increase of
108% compared to the previous year.
The increase is mainly due to the economic growth since 2014, attracting
foreign investors.

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Economic Reforms
Introduction:
In 2012 Spain faced a severe financial crisis
The main sources of uncertainty were rooted around three main
disequilibrium:
1. Macroeconomic and fiscal imbalances
2. Accumulated imbalances in the banking sector
3. Leverage of the private sector
The Spanish Government has addressed these imbalances through an
intense reform agenda

The reform of the public administrations (I)

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 The reform of the public sector builds on the structural reform process initiated in
2012: - A thorough reform of the local authorities to review expenditure priorities.
A full review of the Central Government expenditure through the CORA Committee
Review of the tax code: - expert committee’s proposal was presented in March,
Government’s draft Law to be produced in June.

The reform of the Public Administrations (II)

The Law for the Reform of the Public Administrations targets gains in efficiency and
the professionalisation of political and administrative functions at all levels of
government .
The reform has four main objectives:
 To clarify local governments’ responsibilities in order to avoid overlaps.
 To rationalise the organisational structure.
 To ensure financial and fiscal discipline.
 To promote business-friendly regulation Apart from the legislative measures the
Central Government is implementing a series of structural measures to streamline
expenditure and to reform the State Administrations.

Labour market reform

It addresses Spain’s most important imbalance.
Activation policies complement the labor reform.
Spain is reforming its public employment services and launching new
tools to fight against unemployment and accelerate resource
reallocation:
New coordination and programming framework through annual
employment plans: funding to regions subject to efficiency measures
through a new set of indicators, best practice sharing.
Training for the employment and vocational training reform:
Competition, transparency and close monitoring of actions .

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 Private sector collaboration in matching services and new national
employment website to spur mobility and improve matching process.
Hiring subsidies to lower labour costs, specially for SMEs and younger
workers.
Rationalisation, better targeting and more conditionality of
unemployment benefits.
Special plans for the youth: European youth guarantee and Spanish
Strategy for youth unemployment and entrepreneurship.

1.2 Impact and recommendation on macroeconomic

policy changes
The Spanish economy is transitioning from an internal investment- and
consumption- based economy with huge current account deficits into one
with an increasing surplus

The weight of exports in GDP has increased from 23.9% in 2009 to

34.1% by 2013-Q4

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 Current Account has reverted from a deficit of 10% of GDP in 2007 to a
surplus in 2013

The cyclical current account adjustment is giving way to a structural one

This process has been supported by the structural reform process and
deleveraging in the private sector :-

The productivity- and cost-gap built up during the initial years of the
EMU is eroding quickly

Lower growth needed for employment creation in the private sector

Re-composition of the asset/liability structure of firms’ balance sheets

Non-financial firm’s debt has declined from 143.8% of GDP in 2010 to

129.0% by 2013-Q4

Household’s debt has declined from 87.4% of GDP in 2010 to 77.1% by

2013-Q4.

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Sources
Trading Economics

https://www.spainmaster.com/statistics.htm

Instituto Nacional de Estadistica

https://www.worldometers.info/world-population/population-by-country/

https://www.imf.org/external/pubs/ft/weo/2019/01/weodata/weorept.aspx?pr.x=
48&pr.y=18&sy=2016&ey=2021&scsm=1&ssd=1&sort=country&ds=.&br=1
&c=184&s=NGDP_RPCH%2CNGDPD%2CPPPGDP%2CNGDPDPC%2CPP
PPC%2CPCPIPCH&grp=0&a=

https://www.cia.gov/library/publications/resources/the-world-
factbook/geos/sp.html

https://data.worldbank.org/

statista.com

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