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Spain has become a major developed economy due to its strong industrial sector and its increasingly open markets. Despite its traditional reliance on agriculture and tourism, the country has modernized its economy over the past several decades and diversified into more knowledge-based industries. In recent years, the government has implemented economic reforms to stimulate economic growth, encourage foreign investment, reduce unemployment and poverty, and promote overall stability.
The Wall Street Journal described the Spanish economy as one of the largest and most dynamic in Europe. As of 2019, it is the 14th-largest economy in the world, with a GDP of US$1.413 trillion in 2018. Employment has seen an increase from 23.7 million in 2002 to 28.6 million in 2018, and it is the sixth-largest exporter among the European Union members.
The government has created a stable and attractive environment for foreign investment, with a legal system that is transparent and readily adaptable to foreign needs. It has also invested heavily in infrastructure, making it easier to transport goods in and out of the country, as well as making telecommunications more efficient.
The Spanish economy is fueled mainly by its large tertiary sector, which is composed mainly of the services industry. This sector accounts for approximately three-quarters of the nation’s GDP. In 2018, the services sector grew 4.3% year-on-year, with tourism being the main engine of growth. Additionally, the industrial sector also enjoyed a solid growth of 2.1%, mainly due to a rebound in automotive and construction activity.
The agricultural sector contributes about 4% of GDP and employs around 10% of the country’s active population. This sector is one of the most advanced in the European Union and production is mainly focused on fruits, vegetables, meat and cereals.
Spain’s banking system is one of the most profitable in Europe. Madrid-based Banco Santander, one of the country’s most successful companies, is rated third in the world and the largest bank in the Eurozone. Spanish banks are well capitalized and compliant with banking regulations, although they are still exposed to continuing market turbulence, a not-so-strong economy, and a stubborn Euro.
Spain is a major player in the Eurozone and a key member of the European Union, with a strong impact on policy decisions. In addition to being one of the largest countries economically, Spain is also considered a powerhouse politically, with significant influence on economic, political and social policies. As such, Spain is an important factor to consider when looking at the future of the European Union and the global economy.
