Spain - slowly recovers from throes of global financial crisis: ARIRANG NEWS

ARIRANG NEWS

Published on 6 Mar 2017

경제침체 딛고 일어나는 스페인… 한국 배울 점 있나?

Spain's economy is slowly getting back on the recovery track in the wake of the global financial crisis,... with its growth rate outpacing that of major European nations.

With Korea also facing a slowing economy, Kim Min-ji dissect what kind of lessons we can learn from Barcelona, to swim out of danger. 

Spain is slowly recovering from the throes of the global financial crisis,... but Spaniards still have painful memories of that time. "We were walking in the street and the shops were closed and with a tag saying 'rent,' but no one was buying anything."

Although that's not the case anymore, there are still some problems that have persisted since then -- including high unemployment. "It's still tough for young people -- most with temporary jobs in the service sector such as waiters or hotel workers -- so life is still pretty hard for them."

At the same time, there's no doubt that the country is on the recovery track, especially with consumption and exports picking up,... following government efforts to boost the economy,... including fiscal and market reforms.

As a result, Spain's growth has outpaced that of most of its EU counterparts, even though it's expected to weaken slightly in the coming months. "The Spanish economy is expected to grow in the mid-two-percent range this year,... slowing from growth of over 3 percent in 2016. While it still maintains recovery momentum,... it faces a slowdown in job creation, rising consumer prices and an array of external uncertainties."

Spain's unemployment rate stands at almost 19 percent,... the second highest in the EU after Greece.

Job growth has been slow and job quality, poor.

That combined with high inflation could take a toll on consumption going forward.
Spain is also facing a raft of uncertainties from abroad,... including Brexit,... although the impact is yet to be seen,... and the recovery in global oil prices.

Like Spain, Korea is also heading into a cycle of low growth -- and is on track to post growth in the two-percent range for a third straight year.

However, experts say that while the economic structures of the two countries are different,... there are things Korea can learn from Spain's experience. "Austerity by itself doesn't help economic growth. I'd say that Spain hasn't grown thanks to the austerity, it has grown in spite of them. It's also about creating quality jobs, because creating jobs might be a short-term solution, but the distributional issues, equity issues that might be created, might have very long-term effects."

Korea's troubles include political turmoil possibly leading to an early presidential election,... slowing consumption... and an ongoing corporate restructuring drive. "As long as you have high household debt, consumption is not going to pick up very much. Korean industries undertaking a serious restructuring, have frictions... and frictions mean low growth and unemployment."

The expert said patience will be the key... as Korea confronts these issues,... adding that support measures targeting vulnerable groups,... like those laid off from the restructuring programs, will bring more positive results in the long term.
Kim Min-ji, Arirang News. Barcelona.