The Economy of Spain

The economy of Spain is the ninth-largest economy in the world, based on nominal GDP comparisons, and the fifth-largest in Europe. It is regarded as the world’s 15^th most developed country. Spain’s economy had been credited with having avoided the virtual zero growth rate of some of its largest partners in the EU.

The Spanish government official GDP growth forecast for 2008 in April was 2.3%. This figure was successively revised down by the Spanish Ministry of Economy to 1.6. In reality, this rate effectively represented stagnant GDP per person due to Spain’s high population growth, itself the result of a high rate of immigration.

Since the 1990s some Spanish companies have gained multinational status, often expending their activities in culturally closed Latin America. Spain is the second biggest foreign investor there, after the United States. Others have expanded into Asia, especially China.

During the last four decades the Spanish tourism industry has grown to become the second biggest in the world, worth approximately 40 billion Euros, about 5% of GDP, in 2006. Being the second tourism destination in the world, Spain has a tourism industry sector which contributes nearly 11% to the country’s GDP employing about 2 million of the total labour force.

The automobile industry in Spain is a large employer in the country, employing 9% of the total workforce in 2009 and contributing to 3.3% of the Spanish GDP, despite the decline due to the economic recession of the past couples of years. In 2009, Spain was in the top ten of the largest automobile producer countries in the world.

The Economy of Italy

Italy has a capitalist economy with high GDP per capita and developed infrastructure. According to both the International Monetary Fund and the World Bank, in 2009 Italy was the seventh-largest economy in the world and the fourth-largest in Europe. Italy is a member of the Group of Eight (G8) industrialized nations, the European Union and the OECD.

In Italy there is a considerable north-south divide, where Northern Italy is dominated by a highly developed and capitalistic economy, whilst Southern Italy is far less advanced and more based on agriculture and tourism.

Italy has few natural resources. With much of the land unsuited for farming, it is a net food importer. There are no substantial deposits of iron, coal, or oil. Proven natural gas reserves, mainly in the Po Valley and offshore Adriatic, have grown in recent years and constitute the country’s most important mineral resource. Most raw materials needed for manufacturing and more than 80% of the country’s energy sources are imported.

The energy sector is highly dependent on imports from abroad: in 2006 the country imported more than 86% of its total energy consumption.

The northern part of Italy produces primarily maize corn, rice, sugar beets, soybeans, meat, fruits and dairy products, while the south specializes in wheat and citrus fruits. Italy is the first or the second largest producer of wine in the world and one of the leading in olive oil, fruits, flowers and vegetables.

Unemployment is a regional issue in Italy – low in the north, high in the south. Chronic problems of inadequate infrastructure, corruption, and organized crime act as disincentives to investment and job creation in the south. A significant underground economy absorbs substantial numbers of people, but they work for low wages and without standard social benefits and protections. Women and youth have significantly higher rates of unemployment than do men.