Essay Sample on Good Reasons to Invest in Spain

Paper Type:  Essay
Pages:  6
Wordcount:  1386 Words
Date:  2022-04-12


Efforts to stimulate economic growth following years of stagnancy and slow economic growth reflects in the numerous investment opportunities unfolding in developed economies. Such reveals in Spain after many years of economic crisis. Lallement observed that Spain has become attractive to both savers and investors from all over the world, and especially the U.S (267). Spain is in the recovery process after the 2007 economic recession which ended ion 2013. As a result, numerous opportunities have emerged in the country and thus making it appealing to the U.S investors. Beyond the opportunities unfolding in the recovering economy, being Eurozone's fifth largest economy, a great cultural and tourism power location with a competitive real-estate industry makes Spain an attractive investment destination for the United States investors.

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The real estate fetches competitive price levels lower than the expected value in future. According to Taltavull and White (2012), Spanish real estate is very promising as it is gradually recovering in the wake of the crisis besides its impact to the added value (AV) (347). The construction sector in Spain has historically been of great significance and contribution to the economy. It has significantly contributed to the country's AV with the investment inherently oriented to capital goods production. Moreover, the spillover effects from construction activities support Spain economic growth through the increased demand for goods and services from supporting industries. The collapse of the housing industry, following the Global Financial Crisis, stimulates the modest growth in its economy previously. The real estate sector has, therefore, had the most substantial credit constraints since the post-war era in Spain. The insufficient construction is deemed to have reduced the ability of the real estate sector to catalyze other spheres of economic activities. Thus, an evaluation of momentum has formed the core of identifying potential recovery and the capability to augment economic growth in future, which depicts emerging opportunities (Taltavull and White 360). The construction sectors feed into expanding the country's real estate industry.

Positive growth in the construction sector dominates the triggers towards improving investment opportunities. The construction sector in Spain accounts for 65% of the total economic investments classified into infrastructures, housing, and non-residential building. There have been positive growth rates since the year 2013 showing a great recovery from 2007 crisis levels whereby both the real estate and construction services recorded stable growth rates of about 2% (McGreal and Taltavull 2034). The demand factors in the construction sector are gradually leading to price recovery as demand increase across the real estate industry. The greatest gain appears in regions characterized by rental markets. The elevated recourse of renting in Spain has a substantial change and impact in the Spanish society and economy (Arevalo and RuizCastillo 843). Therefore, investing in Spain real estate is the conducive environment for the U.S.

Being the fifth largest economy in Europe makes Spanish recovery presents numerous opportunities. Its size and high-growth assure a huge inflow of viable investment. Spain's annual gross domestic product of $1.1 trillion makes ranks fifth largest economy in Europe (ITA 2). In 2016, Spain indicated a 3.2% economic growth which formed the second yearly positive or increased growth rate since the global crisis in 2007. Additionally, the forecast has predicted and suggested an approximate growth of 2.7% in the future. The recovery has been catalyzed or driven by the recorded tourism, the export levels in Spain as well as the revived domestic consumption levels. Spain faced a recession in 2008 that it, though overcame, through a solid GDP growth rate to rank ninth in the world. Again, Spain emerged from the crisis in 2013 energized, whereby the government carried out various initiatives in 2012 through the Popular Party, to bring down the deficit (ITA 3). The recovery plan features restructured and improved labor laws, financial sector and public services. The presence of these reforms makes Spain more competitive as compared to costs in other countries in the Eurozone.

The economic reform processes have allowed Spain reverse unemployment trends hence triggering increased disposable income to the households. These crises also triggered a drastic increase in unemployment rates that grew to nearly 27% in 2013. Economic reforms triggered the decline in unemployment rate to 18.6% in 2016, and the youth unemployment dropped by 50% in 2017 (ITA 4). The economists forecast of a declining unemployment rates matching government resources and efforts to lower it below the 17% mark attained in early 2017. The projected recovery calls for new government projects to create approximately 500,000 new opportunities (ITA 5). It creates an opportunity for investment being a country that has historically been offering a significant market destination for American exports. Besides, hosts five of the ten largest companies worldwide spread across banking, infrastructure, telecommunications and energy sectors). Statistics show that Spain companies employed approximately 81,700 U.S citizens while generating approximately 880 million USD in the 2015 U.S exports (ITA, 10). The present recovery promises increased demand for exports as disposable income rises amongst households.

Spain is a major cultural and tourist power location eased by its welcoming culture. The open-door policy to foreigners increases the product and service. As Heyck asserts, the country is also proud of its culture and history. States in Latin America have shown interest in linguistic and cultural affinities. As a result, Spanish companies like Telefonica, banks, and Santander have attracted Latin America investors. Spain and U.S share strong ties derived from the rich common heritage enhanced by the escalated significance of the Spanish language in their national cultures (46). The bilateral cultural, legal framework alongside the scientific relations with the U.S has been included in the 1994 Agreement on Cultural, Educational and Scientific Cooperation eases investor integration in Spain. The U.S has an ambitious initiative of cultural events, called the Spain, Arts & Culture initiative that is run by the Spanish embassy through the various Consulates General in the country. In the U.S, Spanish is spoken by over 55 million people making it the second most spoken language in the country (Fisher and Figueira 25). The variety of culture in Spain is attractive.

High levels of sustained creativity positions Spain among the most visited county. According to Sharpley and Telfer observed Spain enjoys a reputation for creativity and culture ranked the third most visited country with over 75 million visitors in 2016 (13). Spain's approach to increased diplomatic relations aided it in attaining a solid rank in the Engagement sub-index. Moreover, tourism in Spain has historically been its most crucial sector. It has formed the third most significant and global tourist destination. It is ranked as the second after the U.S receipts (Carrillo and Jorge 90). It provides excellent potential regarding outbound travel as a source of U.S visitors. Tourism historically formed Spain's most crucial sector, being the fifth largest market in Spain, and 16th largest worldwide (95). The visitors offer the direct source of demand for the US goods when visiting Spain, hence assured market.


In conclusion, it is good to invest in Spain with above analysis indicating unfolding opportunities viable for the United States investors. Spain is the fifth largest economy in Europe hence presenting a larger market for US products. The competitive price of Spanish real estate is lower than what forecasted performance. Lastly, its global leadership as a tourist and cultural center makes it a continental gateway for US products in Europe. The unfolding opportunities following years of spirited government-led reforms yield significant attractiveness to the United States investors.

Works Cited

Arevalo, Raquel, and Javier RuizCastillo. "ON THE IMPUTATION OF RENTAL PRICES TO OWNEROCCUPIED HOUSING." Journal of the European Economic Association4.4 (2006): 830-861.

Carrillo, Marianela and Jesus M. Jorge. "Multidimensional Analysis of Regional Tourism Sustainability in Spain." Ecological Economics, vol. 140, Oct. 2017, pp. 89-98. EBSCOhost, doi:10.1016/j.ecolecon.2017.05.004.

Fisher, Rod, and Carla Figueira. "Revisiting EU Member States' international cultural relations." Report ECF (2011).

Heyck, Denis Lynn Daly, ed. Barrios and Borderlands: Cultures of Latinos and Latinas in the United States. Routledge, 2014.

ITA. "Spain - Market Overview Export.Gov." Export.Gov, 2018,

Lallement, Michel. "Economic Crises and New Modes of Social Regulation in Europe (2008-12)." Emp. Rts. & Emp. Pol'y J. 17 (2013): 257.

McGreal, Stanley, and Paloma Taltavull de La Paz. "Implicit house prices: Variation over time and space in Spain." Urban Studies 50.10 (2013): 2024-2043.

Sharpley, Richard, and David J. Telfer. Tourism and development in the developing world. Routledge, 2015.

Taltavull de La Paz, Paloma, and Michael White. "Fundamental drivers of house price change: the role of money, mortgages, and migration in Spain and the United Kingdom." Journal of Property Research 29.4 (2012): 341-367.

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