Spain might not be as hard-hit as its Grecian neighbors, but the country is grappling with problems of its own that could drag its exchange traded fund (ETF) down further if the country doesn’t push through structural reforms.
Spain may have been unfairly lumped in with other high-deficit countries, but that doesn’t mean all is operating smoothly. Its budget deficit is 11.4% of GDP, unemployment is 19% and the economy shrank 0.1% in the fourth quarter. [Issues Facing Spain.]
Spain’s saving grace is that they have fiscal credibility and the current-account deficit nearly halved in the first nine months of 2009 compared with the year-earlier period, says Richard Barley for The Wall Street Journal. But the government must push through structural reforms to get the economy moving again, because in the long run, more periods of little to no growth could damage confidence. [Hope in Sight for Spain and Portugal?]
For more stories about Spain, visit our Spain category.
- iShares MSCI Spain (NYSEArca: EWP)
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