Europe’s star performer is in trouble, but the government takes heart in the likelihood of the Spanish economy having a soft landing. Spain’s real gross domestic product (GDP) growth has outperformed that of the developed world by an average of 0.6 percentage points over the past decade.
But with a sharp slowdown in the housing market and the related correction in the residential construction sector, this year’s economic growth is forecast to fall to 2.5% according to the most optimistic forecasts, from 3.8% in 2007, although there is a considerable disparity in GDP growth estimates.