The Spanish economy has changed dramatically since the 1950s. By the year 2000 Spain had the world’s seventh largest gross domestic product (GDP), a measure of all the goods and services a country produces. However, as late as the 1950s the United Nations classified Spain as a developing country. Spain industrialized late, and only partially, so that until the 1960s the country’s industry was confined almost entirely to the metropolitan areas of Barcelona and Bilbao. With the exception of Madrid, which remained primarily an administrative center, virtually all the rest of the country lived from primary economic activities—mainly agriculture but also fishing and mining.
When wider industrialization finally took place in Spain, it did so under an authoritarian regime—an occurrence unique in the Western world. As a result industrialization was based on special circumstances, in particular the existence of a cowed labor force and massive government protection against competition from imports. Many of Spain’s industries belonged to the public sector. This approach produced a considerable boom in the decade from 1962 to 1972. But it came to an abrupt halt with a jump in petroleum prices in 1973 and the end of the Franco dictatorship two years later. One consequence was that industry never came to dominate the Spanish economy. No sooner had manufacturing overtaken agriculture in the early 1970s than it, in turn, was surpassed by services.
Spain’s next major advance came in the 1980s. Entry to the European Community in 1986, preceded by a program of industrial restructuring (reconversión), led to a second period of rapid growth at the end of the 1980s. This growth was fueled largely by public spending on infrastructure and services, and by internal investment. Thereafter, Spain was particularly hard hit by an economic slump in the early 1990s, but it also recovered particularly strongly.
In 1997, against most expectations, it qualified for entry to European Economic and Monetary Union (EMU), the single currency and single monetary authority in the European Union (EU). Subsequently, Spain experienced a third boom, with economic growth rates among the world’s highest. It weathered the economic downturn of the early 2000s rather better than most European economies.
After 20 years of EU membership, Spain’s per capita GDP reached nearly 90 percent of the European Union average. The gross domestic product in 2005 was $1,124.6 billion. The national budget in 2005 included revenues of $279.5 billion and expenditures of $302.4 billion. The economy today has become fairly typical of a developed country, dominated by the service sector and with well under 10 percent of the workers employed in agriculture. Spain’s participation in the global economy has also grown and by the early 2000s came to include significant investment abroad, principally in Latin America. Spain continues to depend on imported energy, and it has a rather strictly regulated labor market with an accompanying high level of unemployment. "Spain" © Emmanuel BUCHOT, Encarta, Wikipedia
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