2009 Review
FTSE 100 gained 22% over the year ending at 5418. A staggering 56% increase from March to the year end. The record growth since 1997. Euro exhange rate up from 1.02 to 1.12, which represents some comfort to expats in Spain, but I am sure they would prefer to see it go higher. Despite Mr Zapatero’s comments, Spain will continue in the doldrums for quite some time.
Gloomy Forecast for Spain
Despite Senor Zapatero stating Spain would be out of recession by the end of the year, reports in the British press yesterday , quoted the EU as saying that Spain was likely to slip further into recession and that unemployment will reach 25%. Now this figure is only based on people who are entitled to claim, and does not exclude “autonomo” workers, who may well have deregistered from the system.
Demand for property is only 250,000 a year, yet there are well over .16 million empty or part completed properties, which suggests that it will be at least 6 years until that slack is taken up.
Add to this that exports from Spain are costing more to non EUROZONE currency countries, life is likely to be very difficult, unless domestic demand can be stimulated further.
The Spanish government are talking about raising taxes to cover the situation, but this will only add pain to the economy.
