Spain’s Current Account Deficit

From 1980 to 2008, Spain had a steady increase in GDP per capita. However, in 2009, the GDP per capita dropped, which means that people in the country had a lower income than the previous year. After that drop in GDP, it went back up again this year. Since the GDP in rising, it means that people can spend more money on imports. This would bring in more imports than exports, which leads to a current account deficit.

ARTICLE: http://blogs.wsj.com/source/2010/11/26/spanish-pm-remains-defiant/

This article talks about Spain’s problems that came with the current account deficit. Since Spain imports more than it exports, it needs funding from other countries. Right now, Spain has a strong euro, but is not competitive internationally. Other countries don’t want to provide money for countries like Spain. Also, the prime minister of Spain is saying that he is not willing to lower students’ tuition or reduce the bloated bureaucracy, which are two easy ways to help the situation.

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