Spain: Selected Issues
International Monetary Fund, Apr 22, 2009 - Business & Economics - 93 pages
Spain’s housing boom was supported by rapid economic expansion, strong employment growth, an immigration boom, and low real interest rates. With the abrupt drying up of funding since mid-2007, these factors have eroded quickly. Through 2010, employment and value added in construction are projected to halve as peak housing starts are completed. The authorities have launched efforts to help limit foreclosures and to activate the underdeveloped rental market. In the medium term, housing market cyclicality could be reduced by fading out generous home ownership incentives.
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adjustment assets average Banco de Espaņa Bank of Spain BBVA billion Cajas Christian Henn competition construction and real countries credit institutions debt decline demographic developments downturn dynamic Economic employment Employment Protection Legislation Euribor European Central Bank euros expenditure Figure financial turmoil fiscal position Fund staff estimates future primary balances Garcia-Montalvo household formation housing demand housing market housing starts ICT sectors IMF staff calculations immigration impact income tax indicator industry inventory KLEMS Labor Productivity Growth logit transformation Madrid measures mortgage Nicoletti Non-Performing Loans NPLs OECD payments percent of GDP percentage points points of GDP policies population growth product market regulation projected provisions public sector balance ratio real estate real interest rate reallocation reforms rental market residential construction result risk savings banks scenario assumes sector balance sheet Securitization Sources Spanish banking sector stress test structural Table tax base TFP growth Tier 1 capital Tinsa Vivienda VPOs