“Spain is an unusual case among European economies that, otherwise, have disappointing performance.” This is the diagnosis that performs Financial Times in its editorial, compared to just over 1% of the eurozone as a whole.
The British newspaper points out that in recent weeks, S, and at 2.6%, “which underlines the country’s position as the main economy in Europe and one of the most solid in the developed world.
To FT, A combination of factors has promoted Spanish growth such as tourism, which has recovered from pandemic; the subsidies that the Government has destined to improve infrastructure with Spain as the second major beneficiary; the cheap renewable energy that has also attracted direct foreign investment; and previous reforms to boost job stability.
600,000 immigrants from 2022
But for the financial publication, “while other European countries have determined to reinforce its borders, Spain has adopted a more liberal approach. Since 2022, it has registered an annual net influx of about 600,000 immigrants, most of the work age. The growing demand for labor has promoted employment to historical maximum Europeans, ”says the editorial.
For the newspaper, population growth has also driven consumption. A significant part of newcomers comes from Latin America. In 2023, migrants in the region represented around 70% of the increase in the Spanish population, according to JP Morgan. The shared language, cultural similarities and existing networks have facilitated their integration into the labor market and their acceptance in society in general. The immigration increase is expected to continue.
The newspaper highlights that Spain recently simplified the legal immigration routes and plans to grant residence and work permits to more undocumented migrants, but warns that “despite all its success to date, the boom in growth driven by immigration must be careful carefully”.
First, because although the real GDP of Spain, in parity of purchasing power, it has increased around 6.8 % since 2019, in terms per capita has grown only 3.1 %. Immigrants have mainly covered deficiencies in sectors of lower added value, such as hospitality and construction. “To ensure that the standard of living also improves, the slow growth of productivity in Spain must also improve,” FT summarizes.
Therefore, remember that the IMF recommends simplifying regulations and offering tax incentives to increase the availability of long -term risk capital, particularly to boost small businesses. Training initiatives would also boost growth and attract greater foreign direct investment (FDI) in high -end service sectors, such as finance, IT consulting and engineering. In fact, the unemployment rate in Spain remains the highest in the EU.
Secondly, FT advises that political leaders should anticipate broader socio -economic problems that could hinder the sustainability of high migratory flows: most Spaniards support immigration. However, if the government does not provide adequate support for access to affordable housing and public services, the opening to foreigners could be reduced. Rentals are unaffordable for many and there have been episodes of discomfort among local residents and people of North African origin.
Although where it puts more emphasis, the British newspaper is “in the fragmented Spanish political environment that will be a great obstacle to consolidate its economic progress.” “The minority government of President Pedro Sánchez, affected by the scandal, has had difficulties to approve important laws. It is a penalty. Spain has demonstrated to other advanced economies how immigration can be an important source of economic resilience, even in a period of national and international instability. To continue being an example, Spain needs to convert its demographic bonanza into lasting prosperity,” he concludes.
