Downloaded 142 times
Uploaded byOECD, Economics Department
OECD Economic Survey of Spain 2014
The 2014 OECD Economic Survey of Spain highlights that structural reforms in the labor market, banking, and fiscal policies have initiated economic recovery, yet unemployment remains high and innovation is lacking. Recommendations include enhancing job search assistance, improving tax structures, streamlining regulations for business growth, and boosting financing access for firms. While GDP growth has resumed and the current account has improved, public debt remains elevated, necessitating further reforms to support sustainable growth and reduce inequality.
More Related Content
Similar to OECD Economic Survey of Spain 2014
More from OECD, Economics Department
![Awareness of digital currency[1] (1).pptx](https://cdn.slidesharecdn.com/ss_thumbnails/awarenessofdigitalcurrency11-260125155504-b1badee4-thumbnail.jpg?width=640&height=640&fit=bounds)
OECD Economic Survey of Spain 2014
- 1. 2014 OECD ECONOMIC SURVEY OF SPAIN ON THE ROAD TO RECOVERY 8 September 2014, Madrid, Spain www.oecd.org/eco/surveys/economic-survey-spain.htm
- 2. Main Findings Structuralreforms (labour market, banking, fiscal) have put the economy on the road to recovery. 1. Reforms have improved labour market performance even though unemployment rate is still too high. 2. Innovation, especially by business is too low, and talent is under-utilised. 3. In spite of recent competitiveness gains, barriers to entrepreneurship remain high. 4. The banking sector has improved but credit is too low and firms need access to other sources of financing.
- 3. Key Recommendations 1.Strengthen job search assistance and vocational training and improve the tax mix. 2. Raise living standards by increasing innovation and enhancing skills. 3. Streamline regulations and reduce barriers to start and grow firms. 4. Improve insolvency procedures and promote diversified financing sources.
- 4. Reforms are payingoff • GDP growth has resumed • The unemployment rate has started to fall • Unit labour costs have fallen improving competitiveness • Exports have led the recovery • The current account has improved 1. Real house prices seasonally adjusted. The peak occurs in Q1 2007 for Ireland, Q3 2007 for Spain and Q4 2006 for the United States. Source: OECD (2014), OECD Economic Outlook: Statistics and Projections (database) and Housing Prices Database. 2001 = 100 125 120 115 110 105 100 Peak = 100 110 100 90 80 70 60 50 40 30 2001 = 100 115 110 105 100 95 90 85 80 75 70 Spain Germany A. Gross domestic product Volume E. Export performance Ratio of export volumes to export markets 2001 2003 2005 2007 2009 2011 2013 Per cent 30 25 20 15 10 5 2001 = 100 135 130 125 120 115 110 105 100 95 France Portugal B. Unemployment rate D. Unit labour cost Total economy 2001 2003 2005 2007 2009 2011 2013 20 -64 -56 -48 -40 -32 -24 -16 -8 0 8 16 24 Quarters from peak C. House prices1 Spain Ireland United States 95 2001 2003 2005 2007 2009 2011 2013 0 2001 2003 2005 2007 2009 2011 2013 % of GDP 10 5 0 -5 -10 -15 F. Current account balance 2001 2003 2005 2007 2009 2011 2013
- 5. Debts are stillhigh • The budget situation has improved, but public debt is still high and rising. • Private debt is falling. Firms face difficulties to obtain financing. 160 140 120 100 80 60 Spain Germany France A. Household debt2 % of gross disposable income 240 220 200 180 160 140 120 100 Italy Portugal B. Debt of non-financial corporations % of GDP 1. Debt is calculated as the sum of the following liability categories, whenever available/applicable: currency and deposits, securities other than shares (except financial derivatives), loans, insurance technical reserves and other accounts payable. 2. Including non-profit institutions serving households. Source: OECD (2014), “Financial Dashboard”, OECD National Accounts Statistics (database), July. 1 http://dx.doi.org/10.1787/888933127947 40 1999 2001 2003 2005 2007 2009 2011 2013 80 1999 2001 2003 2005 2007 2009 2011 2013
- 6. Fiscal transparency isincreasing Contingent Liabilities Source: Government of Spain (2013), Actualización del Programa de Estabilidad 2014-2017 (Stability Programme Update). For example, there is more information available today about the full extent of public debt.
- 7. The labour markethas started to improve • Spain’s unemployment (24.5%) and youth unemployment rate (55%) are high but are starting to fall; Long-term unemployment is also high. • Many unemployed are ill-equipped to benefit from the recovery and are vulnerable to becoming permanently unemployed Per cent 30 25 20 15 10 5 0 Spain OECD Euro area A. Unemployment rate 2003 2005 2007 2009 2011 2013 75 70 65 60 55 B. Employment rate 2003 2005 2007 2009 2011 2013 60 50 40 30 20 10 0 D. Youth unemployment rate (age 15-24) 2003 2005 2007 2009 2011 2013 70 60 50 40 30 20 10 0 C. Incidence of long-term unemployment1 2003 2005 2007 2009 2011 2013 1. Persons unemployed for more than one year as a percentage of total unemployed.. Source: OECD (2014), OECD Economic Outlook: Statistics and Projections and OECD Employment and Labour Market Statistics (databases), and OECD Short- Term Labour Market Statistics Database.
- 8. The recession hasraised inequality and poverty Spain had the 2nd highest rise in inequality in Europe from 2007 to 2012… …and one of the highest increases in relative poverty 1. The Gini coefficient of household income has a range from zero (when everybody has identical incomes) to one (when all income goes to only one person). Increasing values of the Gini coefficient thus indicate higher inequality in the distribution of income. 2008-12 for France, 2007-11 for Austria and United Kingdom. 2. Relative income poverty is the share of people living with less than 50% of the median equivalised household disposable income. Source: Eurostat (2014), “Income Distribution and Monetary Poverty”, Eurostat Database and OECD (2014), OECD Income Distribution Database. 0.04 0.03 0.02 0.01 0.00 -0.01 -0.02 -0.03 -0.04 ISL PRT NLD DEU CHE IRL POL NOR EST CZE ITA FIN GRC EU27 AUT BEL GBR SVN LUX FRA SVK HUN SWE DNK ESP A. Change in inequality between 2007 and 2012, % points1 4 3 2 1 0 -1 -2 -3 B. Change in the relative poverty threshold between 2007 and 2011, % points2 EST PRT GBR CHL NZL FIN AUS ISL KOR USA DNK NOR IRL OECD JPN DEU CAN CZE MEX BEL ITA SVN FRA ISR LUX POL NLD GRC SWE SVK ESP AUT TUR HUN
- 9. Labour market activationpolicies and training 2.5 2.0 1.5 1.0 0.5 2007² 2012³ 3.0 2.5 2.0 1.5 1.0 0.5 1. Active measures in Panel A cover public employment services and administration, training, employment incentives, supported employment and rehabilitation, direct job creation and start-up incentives. Passive measures in Panel B cover out-of-work income maintenance and support, and early retirement. 2. 2008 for Chile in Panel A. 3. 2011 for Australia, Ireland, Israel, Luxembourg, Poland and Spain; 2009 for the United Kingdom in Panel A; 2010 for Greece and the United Kingdom in Panel B. Source: OECD (2014), OECD Employment Outlook 2014. Training needs are high. Around half the unemployed have lower secondary education or less. Unemployment more than doubled since 2007 but spending on job search and training only rose 10%. Public spending is skewed towards income support measures. 1 http://dx.doi.org/10.1787/888933128612 Public expenditure, % of GDP1 0.0 MEX CHL USA ISR JPN CAN SVK CZE SVN NZL EST AUS KOR POL GBR ITA PRT NOR OECD CHE LUX DEU HUN AUT BEL ESP FRA IRL NLD FIN SWE DNK A. Public employment services and training 0.0 MEX CHL CZE KOR GBR POL JPN NOR NZL USA HUN SVK EST AUS ISR CHE CAN LUX SWE GRC SVN OECD DEU AUT FRA FIN ITA PRT DNK NLD BEL IRL ESP B. Income support
- 10. Innovation needs boosting 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 A. Total research and development expenditure Per cent of GDP 2012 2000¹ 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 B. Business enterprise research and development expenditure Per cent of GDP 2012 2000¹ 1 200 1 000 800 600 400 200 C. Number of science and engineering articles Per million population 2011 2000 80 70 60 50 40 30 20 10 D. Number of patents2 Per million population Average 2010-12 Average 2000-02 1. 2001 for Sweden. 2. Triadic patents, i.e. those filed at the both the European and Japanese Patent Offices, and granted by the US Patent and Trademark Office. Source: OECD (2014), OECD Science, Technology and R&D Statistics (database), July and NSF (2014), Science and Engineering Indicators 2014, National Science Foundation. 1 http://dx.doi.org/10.1787/888933128403 Overall spending on R&D is low due to low spending by business, especially large firms. The impact of innovation on the economy as measured by patents and other outputs is also relatively low. 0.0 ESP GBR FRA OECD USA DEU SWE 0.0 ESP GBR FRA OECD USA DEU SWE 0 FRA ESP OECD DEU USA GBR SWE 0 ESP GBR FRA OECD USA DEU SWE
- 11. Education and skillsneed to be better utilised 30 25 20 15 10 5 Highest educational atttainment Per cent of population, 2012 Lower secondary Upper secondary Tertiary Age 25-34 36 25 39 Age 55-64 65 16 19 Share of tertiary graduates in less-skilled occupations1 Per cent of employees, age 15-64 , 2013 1. Share of employees with a first and second stage of tertiary education (levels 5 and 6 of ISCED, the international standard classification of education) in non-managerial, non-professional, non-technical occupations (levels 4-9 of ISCO, the international standard classification of occupations). Source: Eurostat (2014), "Population and Social Conditions", Eurostat Database, July. 1 http://dx.doi.org/10.1787/888933128555 The share of the population gaining tertiary qualifications has increased significantly… … but many graduates work in less-skilled jobs Source: OECD (2014), Education at a Glance 2014: OECD Indicators. 0 CZE PRT HUN LUX ITA SVK AUT SVN ISL DNK DEU NLD POL NOR TUR SWE EU28 CHE FRA FIN BEL GRC EST GBR ESP IRL
- 12. Spanish business sectoris fragmented Spanish firms tend to be smaller when starting-up and they appear to grow less than in most advanced economies. Average size of firms by age and sector1 Number of employees 80 70 60 50 40 30 20 10 0 A. Manufacturing 0-2 years old USA LUX CAN BEL FRA HUN GBR AUT SWE NOR BRA FIN NLD PRT ESP NZL ITA JPN 80 70 60 50 40 30 20 10 0 B. Services2 Over 10 years old USA GBR BEL CAN LUX FRA NOR BRA AUT HUN PRT SWE NLD NZL FIN ESP ITA JPN 1. Average over the period 2001-11 for Belgium, Canada, Finland, Hungary, the Netherlands, the United Kingdom and the United States; 2001-10 for Austria, Brazil, Spain, Italy, Luxembourg, Norway and Sweden; 2001-09 for Japan and New Zealand; 2001-07 for France; and 2006-11 for Portugal. Owing to methodological differences, figures may deviate from officially published national statistics. For Japan data are at the establishment level, for other countries at the firm level. Data for Canada refer only to organic employment changes and abstract from merger and acquisition activity. 2. Non-financial business services. Source: C. Criscuolo, P.N. Gal and C. Menon (2014), “The Dynamics of Employment Growth: New Evidence from 18 Countries”, OECD Science, Technology and Industry Policy Papers, No. 14.
- 13. Barriers to entrepreneurshipremain high Starting and operating businesses is more difficult than in most OECD countries Barriers to starting and operating a business1 Index scale of 0-6 from least to most restrictive 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2013 2008 SVK NZL NLD ITA DNK AUT PRT CAN GBR DEU FIN CHE EST AUS OECD FRA JPN HUN NOR SWE BEL SVN CZE KOR GRC IRL CHL ISL ESP ISR 1. OECD product market regulation indicator on barriers to entrepreneurship. The OECD aggregate is an average of the data shown. Source: OECD (2013), Product Market Regulation Database, www.oecd.org/economy/pmr. Firms face both regulations that are unfavourable to their growth as well as a regionally and locally fragmented regulatory framework. Spain has lacked flexibility to re-allocate resources to more dynamic and productive firms.
- 14. Exports need furtherboosting • Exports have led the recovery but Spain needs to continue diversifying to more dynamic markets. Share of exports by destination Per cent of total goods exports, 2013 80 70 60 50 40 30 20 10 0 European Union Non-European Union GBR GRC ITA IRL DEU FRA ESP PRT Source: Eurostat (2014), "International trade long-term indicators", Eurostat Database, September. • There is a also a relative overspecialisation in lower technology products. • Competitiveness would be further boosted by higher competition in sectors providing inputs to the rest of the economy (e.g. professional services) and in ports and sea transport activities.
- 15. Deeper analysis providedin the Survey Key recommendations on reducing unemployment faster Activation: • Improve efficiency of public employment services (new IT and other tools and practices) • Introduce personalised activation plans • More clearly define job search and offer obligations • Increase central and regional government coordination, performance based funding to the regions and spread best practice across regions • Make available new vocational education tracks to the unemployed
- 16. Deeper analysis providedin the Survey Key recommendations on reducing unemployment faster • Fiscal policy: cut employer social security contributions for low-skilled workers to stimulate labour demand. • Wage bargaining options: firm and union representation requirements for collective agreements, “opt-in” rather than opt-out to collective agreements • Employment protection options: converge termination costs for fixed-term and permanent contracts, further define conditions for fair dismissal • Housing and labour mobility: rolling periodic leases, means-tested housing benefits, simple arbitration for disputes
- 17. Deeper analysis providedin the Survey Key recommendations on harnessing innovation to sustainably boost growth • increase stability of government innovation funding • greater specialisation and scale of universities and research technology organisations • more peer review and performance base funding • streamlining certification for R&D tax credits • wider career opportunities for researchers • industrial PhDs • predictable and low-cost support to low carbon technologies
- 18. Deeper analysis providedin the Survey Key recommendations on skills and talent to sustainably boost growth • prevent drop-outs using new assessment and education paths • strengthen vocational training • increase information to students about jobs outcomes from tertiary education • improve career guidance
- 19. Deeper analysis providedin the Survey Key recommendations on business sector performance Facilitating start-ups and business growth: • revamp the licence system and reduce regulatory fragmentation by implementing the market unity law • broaden the corporate tax base, lower the rate and review firm size-dependent policies and regulations
- 20. Deeper analysis providedin the Survey Key recommendations on business sector performance Fostering internationalisation and strengthening competition: • integrate internationalisation and innovation policies • strengthen port and electricity regulators; open access to stevedoring activities • reduce numbers of professions for which membership of the professional body is required • reduce vertical integration in the electricity market • pursue efforts to increase judicial efficiency
- 21. Deeper analysis providedin the Survey Key recommendations on business sector performance Tackling over-indebtedness and improving firms financing: • increase incentives for the use of out-of-court and in-court insolvency procedures by SMEs • introduce a new out-of-court negotiated personal insolvency regime • continue to promote diversified financing sources • make further use of mutual guarantee schemes • establish a comprehensive credit registry for SMEs
- 22. OECD Economic Surveys:Spain 2014 • Read this publication • Website with additional information Compare your country data visualization tool Follow us on twitter: Follow us on: OECD Economics OECD OCDE en Español
Editor's Notes
- #2 Slide 1: I crafted all the bullet points by combining the titles of key recommendations to make sentences.