The International Monetary Fund says Spain’s economy isn’t too shabby. Economists caution that the European debt crisis could prolong the rut in the country’s economy, and by extension, Spain’s related exchange traded fund (ETF). Still, some Spaniards are more worried about potential gorings than the economy.
Despite having to bail out a small bank, Spain is doing all right, according to the IMF, but the country still needs to make some big reforms, reports Alisa Roth for Marketplace. Spain’s ETF, iShares MSCI Spain (NYSEArca: EWP) is up impressively in the last week, by 12%.
The boost could also be owed to a little boost thanks to the World Cup. Spain and Netherlands face off on Sunday. iShares MSCI Netherlands (NYSEArca: EWN) is up 7.2% in the last week.
The European debt problem has made banks antsy, and big banks are now charging more to borrow. The costs are ultimately passed on to businesses who need to borrow from them. Beth Ann Bovino, senior economist at Standard and Poor’s, remarked that increased rates will weigh down companies who are seeking to increase hires, which would weigh down employment numbers. [Euro ETFs Riding High, But Can It Last?]
Additionally, pessimistic investors are dumping European debt in favor of other sovereign debt that appears more solid. Still, if the European sovereign debt crisis takes a deeper plunge, it won’t be long before it hits the United States, adds Bovino. [Switzerland ETFs: A Safe Haven in Europe?]
Then, there are those who aren’t too worried about those trivial economic problems. In Pamplona, thousands thronged the historic plaza, spraying each other with wine as the launch of the famed San Fermin bull-running festival began, writes Alan Clendenning for The Associated Press. However, tourism is down for the year and merchants are complaining about low sales as the country deals with the European debt problems and 20% unemployment.
For more information on Spain, visit our Spain category.
- iShares MSCI Spain Index (NYSEArca: EWP)
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.