Torcal Estates Fincas and Country property - Málaga, Spain

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News - January 2007

Economic Stability in Spain

With Europe wide concerns over the cost of the new accession states joining the, ever larger, EU it is rather surprising to see some unlikely stars in the healthy category of economic stability.

Spain has always been considered a poor relation to the likes of France and Italy, however Spanish GDP grew by 3.5% in 2005 and the government has forecast growth will have been, at least 3.4% for 2006. Unemployment is at its lowest rate for 27 years, at 8% this is reduced from 20% during the 1990’s.

Meanwhile Italy faces economic stagnation, with GDP growth close to zero and a budget deficit that has exceeded 3% each year since 2002, which is in fact, against the EU regulations governing each member state’s economic status.

What keeps Spain in the black? Well to a certain degree it is down to the large number of foreign residents that have bought property in Spain who help to maintain spending and have avoided a severe cooling off of the property market.

A recent survey of Spanish banks indicates that as much as 20% of their lending market is to EU nationals born outside of Spain. This is even more interesting when you consider that just 9% of this number are accounted for in the population figures – this represents a large amount of foreign investment, which in turn helps to maintain the economy.

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