The pain in Spain is set to remain

LAST UPDATED: 25 Oct, 2013 @ 12:42
10
SHARE
The pain in Spain is set to remain

SPAIN may be officially out of recession but growth is likely to remain at too low a level to create jobs for a long time to come.

The Bank of Spain announced the country´s GDP rose 0.1% in the third quarter of the year, following nine consecutive quarters of declining output.

Economic growth was driven largely by an uptick in exports, as domestic demand remained subdued.

But while analysts welcomed the news, they warned the country was still in bad shape, and the marginal growth was nowhere near enough to ease the country´s 26% unemployment rate.

Federico Steinberg, an economist at Madrid think tank Real Instituto Elcano, told the Financial Times: “This is good news. But we should not be enthusiastic because we still have much to do on the reform front.

“We still need to increase our competitiveness, we need to ensure that credit starts flowing again, we need further adjustments in the labout market and we have to improve education research and development and regulation.”

Quarterly jobs data is due from the Office of National Statistics in the next few days.

Many worry that the recent improvement in monthly jobs data are the result of seasonal hiring in the tourism industry, something which drops off at the end of September.

10 COMMENTS

The Olive Press are not responsible and do not moderate individual comments before they are posted. Anyone who uses racist, sexist, homophobic or xenophobic language or hate speech will be blocked.
  1. How about lowering the social security fees for autonomos to encourage small businesses? (And I’m not talking about the discounts for the under 30 / 35 rule)

    Or introduce an IVA threshold like the UK?

    Seems like a golden opportunity to encourage more unemployed people to start their own Spanish businesses legally, but at the moment the financial risk is far too high.

  2. Spain’s autonomo fees are ridiculously high obviously. It makes no sense. Most people we know AVOID paying into this system and work on the sly. Not many people have hundreds of euros spare BEFORE the month starts.

  3. @Mark and @Roger, you are bang on. I could open a business tomorrow and employ several people. I might take me 6 to 12mts to make a profit but the Social Security payment would make it impossible to even start. I have not seen one ounce of effort by the government to encourage employment. Have a look here “http://www.doingbusiness.org/” rankings click on Starting a Business and see how far you have to scroll down before you find Spain.

  4. Gave up trying to work in Spain as a small business. The lack of an IVA threshold and the crippling social security fees for autonomos meant that my business was not viable. Now I run a UK based training company doing the same thing as I would have done in Spain and doing very well. Unless the Spanish government does something about encouraging small business in Spain the recovery will be very slow. Small business growth is essential. From small seeds…

  5. Spain now ranks 142 out of 189 countries in the world in terms of how easy it is to set up a business. Spain is now behind Kazakhstan and Rwanda, and has dropped another eight places since just last year.

    See: “http://www.doingbusiness.org/data/exploreeconomies/spain/”

    Can Spain really do no better than Rwanda!? lol

  6. Btw, the self employed in Spain (autonomos) should be overjoyed to hear that the tax is rising in 2014 by 60 euros per year.

    The whole income tax system is being overhauled in 2015. See: “http://uk.reuters.com/article/2013/10/27/uk-spain-tax-idUKBRE99Q02K20131027”

HAVE YOUR SAY...