Iberian Peninsula: analysis by Jesus Castillo, Economic Resarch Natixis / Spain and Portugal
The sun is shining again on the Iberian Peninsula
The Iberian Peninsula has once and for all closed the door on its most serious economic crisis since returning to democracy in the 1970s.
Although the legacies of past deep imbalances (unemployment and high debt) have yet to be overcome, Spain and Portugal are now showing enviable economic momentum with growth rates among the highest of the major countries within the European Economic and Monetary Union.
Although painful, the intensive reforms carried out for several years have paid off. The ongoing investment cycle, improved competitiveness and a buoyant external environment have helped to revive manufacturing activity. Investors had been wary of the two countries for a long time but are now flocking back in.
In the future, on the basis of much more solid fundamentals, continued efforts to reduce the public and private debts inherited from the past will help to reinforce the balance sheets of all economic agents.
The economic outlook for the coming years will remain positive.
How Spain and Portugal’s GDP growth have outperformed Eurozone
Spain and Portugal exports compared to global trade
The two countries are gaining market share since their exports increase faster than global trade.