First quarter of 2013 for Spain was not impressive...by Felix A. Monberg
Thursday, June 27, 2013 @ 7:51 PM
[Author : I am a student of Politics and Economics. I have been writing professional articles for Real Estate companies regarding the Spanish economy and real estate market.]
The first quarter of 2013 showed an increase in Spanish public debt. The amount has now reached a colossal 923 billion euros and is only expected to get worse. In addition, the unemployment rate has not been stimulated nor improved, as the queues in front of the unemployment benefit offices are growing longer and thicker.
Despite Spain's improvements in the business sector and the government structure, panic is still terrorising people as they are desperately trying to find jobs. It was reported that unemployment had climbed new heights, an impressive 27 per cent, which is the second worse in Europe. This is forcing Spanish people to leave their mother country to find something abroad. More disturbingly, the youth unemployment rate is peeking, with more than 57 per cent. They are better known as the 'lost generation'.
Spending is a major problem, as Spanish people are cautious about their budgets. Moreover, public debt is now equal to roughly 88 per cent of their GDP, and the government is urgently trying to encourage household spending as Spain's financial breakdown is only expected to worsen. As a result, we see prices in the real estate market fluctuate as it was reported that the price for renting has decreased by 0.1 per cent. It seems that the Spanish population is responding to the government's efforts, by becoming more independent as there is little trust between the two. People do not buy Spanish government bonds, and a whole generation of 'lost' young people are fleeing their country. They are working in opposite directions.
Domestically, it can be concluded from the first quarter of 2013 that the labour market is not improving as it should, compared to other European countries. There is a lack of innovation and business creation within the country, and the young graduates who are supposed to be a key component to the future Spanish economy, are leaving the country. However, foreign investments and money injections are increasing and, hopefully, companies will come to Spain as new reforms will improve competitiveness and increase transparency.