The Spanish economy is the largest in terms of Purchasing Power Parity and is the 14th largest in the world by nominal GDP. Import and Export rank in the top 20 globally. Spain is a mixed economy with roots in capitalism. The country is fairing great in terms of unemployment which reduced dramatically in the last 5 years, but the true unemployment rate is unknown with a much working population is working in grey areas or considered inactive due to lack of formal job terms and titles. To sum it up, Spain ranks 10th worldwide in terms of quality of life.
The arrival of the pandemic brought with it an unprecedented economic decline. Spain has suffered one of the largest contractions amongst EU countries with a GDP downturn of 12.8%. Metal, chemicals, textiles, apparel and tourism are some of the main industries in Spain and each has been impacted differently in the trying time. The tourism industry which accounts for 12% of GDP has suffered the worst while the chemicals industry is getting by with rising demands for disinfectants. Recovery too is expected to be uneven. The IMF predicted recovery growth in October 2020 was 7.2% which went onto be 5.9% according to the recalibration done in 2021.
In the service sector, small and medium enterprises are finding it hard to survive at a debt risk that was predicted to be 37% in 2020. But the government had been swift in its support to provide liquidity which created positive results as the growth in the third quarter of 2020 but remained 8.3% below the previous year. Helping along the way to achieve all the goals rudimentary for economic recovery is the ICT sector.
The ICT sector in Spain has been rising rapidly over the last decade and has been progressively adopted into public services. In 2018, the ICT turnover in Spain was about 4% of the GDP. According to IESE Insights, this sector ranks fourth in terms of economic contribution, most of which was inclined towards the telecommunication services in the early rising days. Currently, the high demand for digital infrastructure and cybersecurity along with broadband and other internet services has pulled the turnover for this sector above other main Spanish industries.
Nonetheless, the Spanish economy is facing its worst-ever economic crisis. The growth results from some of its industries are far from capable of pulling the national economic growth to match the pre-pandemic levels. The future is certain to rise though the pace is set to be slow and rocky.