The Economic Crisis in Spain Essay

Decent Essays
The Economic Crisis in Spain
Spain is one of the powerful state with an expanssion economy in EU from 1995. His GDP was growing year by year without any problem , but in 2007 the economy of Spain start to fall down, because of a collapse in Housing Market, that can lead to a recession or a slowdown. The economical boom of spain started in 1995. The construction of buildings brought Spain the biggest increase in economy in EU , in the last 10 years .The main ressource of Spain’s GDP was the Housin Market that consisted about 5%-15% of Real GDP every year. The oproximately rate of growth of GDP for the last 4 years was about 3%-4% per year, but the economists assume that for 2008 the growth rate will be about 1%, that is meaning that
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But the price of a house in Spain will decrease more than it was in US , because Central Bank of Europe has raised the interests to 3,75% , more than 7 times in comparation with 2 years ago, and the number of application for credits diminished with 10% in Spain.

The economic crisis scared the foreign investitors. In 2007 , the foreign investitors has spend 4 billions $ on the Housing Market of Spain with 15% less than in 2005. The foreign investitors try to take back his money, they do not want to get in recession with their investment. The Spain’s economists have studied the case of Sweeden that was happen in 90’s when the price of buildings go down with 50%
If the Spain will go in to a recession then the unemployment will raise from 7% to 11% that mean with 800000 people more. But it is not all , the base of Spain labour are the emmigrants, it is a cheap employ, and if they will come back in their countries , the labours price will raise too. The real estate sector has been the main engine behind more than a decade of strong economic growth in Spain , the gouvernment repply to fix this problem is to spend 16 billions $ that include the reduction in taxes for each citizen, and to maintain the employment in the domain of construction and
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