After the financial crisis and the eurozone deficit tussle, Spain’s economy has been left in tatters. Spain’s exchange traded fund (ETF) has been hit hard and it may stay that way for awhile as Spain’s economy stagnates as high unemployment reins and more people depart the country in search of better opportunities elsewhere.
Spanish Economy Minister Elan Salgado stated that infrastructure spending will only be reduced by 500 million euros for 2011 as compared to the previous estimates of 6.4 billion euros in spending cuts, reports Martin Roberts for Reuters. The government is committed to bringing down the deficit to 6% of GDP.
The Bank of Spain reported that GDP growth increased by 0.2% in the second quarter from the first quarter, according to BusinessWeek. Still, the overall economy remains 0.2% smaller year-over-year. Growth in Spain is the slowest among the eurozone countries.
Unemployment is hovering at 20%, the highest in Western Europe, as stated by Barcelona Reporter. Exacerbating the situation, Spain’s workers are migrating to other countries as they fear the country’s job instability. Experts describe the situation as a short-term occurrence.
For more information on Spain, visit our Spain category.
- iShares MSCI Spain (NYSEArca: EWP) is down 11% in last two weeks
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.