4. Determinants of Economic Growth in Spain: A Historical Viewpoint

This chapter focuses on the specific factors determining Spanish economic growth from 1985 until now. After a short summary of the main features of this period, from a comparative point of view, the important structural changes are highlighted. Later, the role of labour and total factor productivity on trending growth are analysed, as are the main shocks and macroeconomic imbalances that have accompanied them. With an increase in annual per capita GDP four decimals higher than the average for the EU-15 from 1985, Spain today has an average income level equivalent to 89% of the average income of this group of countries. This formidable economic growth was facilitated in large part by the increasing openness to foreign competition achieved by integration into the EU and by incorporation into the Eurozone. It has also been favoured by considerable immigration since 1995.