Tourists and Migrants: Winning Combo Helping Spain Economy Keep Pace With USA
Under the besieged economy map, one fact remains: that the massive influx of migrants and growing tourism sector have provided a significant impetus to the Spanish economy, allowing it to maintain a crucial pace with its peer the US economy.
For many years, the Spanish economy has been presented as a sinking ship, with the lack of sustained economic growth and public deficit reduction that raised red flags. However, it has had a radical transformation in the recent years, especially after the peak of 2019.
One factor is the strong tourist influx, with over 82 million tourists visiting Spain in 2019 (the triumph the last time). This pushes up inward foreign investment and generates an essential source of employment for many local residents. In 2019, the tourism sector propelled a 4.2% growth of the Spanish economy, with added value per tourist rising to €1,043. It’s recorded, the highest level since 2008.
The second decisive factor for Spain’s economic growth is the influx of international migration. A significant number of skilled and unskilled workers, especially from the Eastern Europe, have come to Spain, Morocco, Ecuador, and other non-EU nations seeking better job opportunities. Most of these migrants settle mainly in the regions of Andalusia, the Valencian Community, and Catalonia.
Studies by authors like Pablo Hernández de Pablos, professor of economics, University of Murcia, have demonstrated the importance of these newcomers in reactivating the aged industrial equipment like construction, food, and especially manufacturing in certain regions. Additionally, the entry of fresh workers within the services sector, including tourism, hospitality, and health, also had a positive effect on occupation and income growth.
Furthermore, it’s been an enormous impetus for repatriation and increased investments in these areas. The migration factor spiked an increase of 2.5%, accounting for around € 45 billion in the 2019 GDP, making Spain’s economy one of those that have grown in relation to that of the United States. This improvement brought about growth from investments and added to foreign direct investment greater than 2 billion €, a rough indication that foreign investors trust the new Spain.
The Mix of these two elements, the elevated influx of migrants, and the growth of tourism, converted in the primary catalysts driving the recovery and stable growth of the Spanish economy, an empowering the competitiveness of this country on the world stage among major economies.