Thursday, 19 September 2013

Spain could emerge from recession this year


Despite the recession lasting three months longer than had been originally forecast, Spain’s economy looks likely to imminently exit the three year downturn.

According to the National Institute of Statistics (INE), Gross Domestic Product in Europe’s fourth largest economy shrank by 0.1 per cent from the first to the second quarter of this year. But in the third and fourth quarters it should be flat or grow by up to 0.2 per cent.

Should this come to fruition, it would support the government’s line that the country will be out of recession this year and allow it to reach the end-of-year target of a 1.3 per cent economic contraction.

Speaking on the upbeat findings, Spain’s Economy Secretary, Fernando Jiménez Latorre, comments: “We believe there’s been an important turnaround in the economic cycle and that the bases are there to continue this new trend and this will show growth, finally ending the long and deep recession.”

The drop of 0.1 per cent in GDP was the lowest since the second quarter of 2011, when the Spanish economy began to shrink.

With spending cuts, unemployment at 26 per cent and tax hikes still dampening domestic demand, it is exports and the tourism sector that is largely responsible for what is expected to be a gradual reversal in Spain’s economic fortunes.

Exports have jumped 6 per cent after a 3.8 percent decline in the previous quarter, mainly because the EU, which includes Spain’s primary trading partners, emerged from its longest-ever recession in the second quarter.
Similarly, the number of tourists grew by 3.9 per cent in the first two quarters of 2013, compared to the same period in 2012. Tourism accounts for almost 11 per cent of Spain’s GDP and 12 per cent of jobs.

Whilst, clearly, there is a long way to go until there is a full recovery, news that Spain’s economy could be about to turn a corner has been supported by many business owners on the Costa del Sol.

“There’s a growing sense of optimism amongst those of us who own our own businesses; there’s a growing sense that there is, finally, a light at the end of what has been a very dark tunnel. Most of us kind of feel that if we’ve made it this far through the recession, we’re now going to be OK,” explains Jules Lehanneur, who runs a beauty salon in Mijas.

Alhaurín de la Torre resident Daniel Harper, who has run his own construction and decoration firm on the coast for the last seven years says: “My customers – both new and existing – have seemed over the last six months or so slightly less reluctant to spend money. Of course, this then has a knock-on effect to me and my suppliers. Things are starting to move a bit more.”

Others, however, are not so convinced. One restaurateur from Fuengirola, who declined to be named, affirms: “Even though things do appear to be picking up slightly, things are still incredibly tight. There are lots of people around but they’re just not spending the money they once did, especially our Spanish customers.

“This summer has been better for us than last summer, but it’s nowhere near where what it used to be. We’re not out of the woods yet.”

Extracted from The Sur in English 

Millionaire foreign investors to buy property in exchange for visas


Thousands of non-European Union high-net-worth individuals are expected soon to invest in luxury Spanish properties, in return for being granted permanent residency in Spain, according to international real estate experts.

In a bid to revitalise the property sector, and therefore the wider economy, the Spanish government announced last October that those who invest more than 500,000 euros in real estate will be allowed to stay indefinitely in Spain, and therefore the entire Schengen Area, which consists of a group of 26 European countries.

The law is due to be passed any day, but it is now more likely to come into force in September, after the summer break. We will not know the exact process until the law is enacted but it is expected to be an administrative one involving checking the applicant has all of the necessary documentation.

So, why is Spanish residency such an attractive prospect for so many foreign investors?

“The law is interesting because it provides a hassle-free, relatively cheap solution to non-EU clients who want to get European residency and travel rights for themselves and their families - it will allow investors to move freely across the Schengen zone,”

“In some cases it will be for lifestyle and education reasons, and in others it will be a combination of investment and diversification of risk. Chinese investors, for example, may use it as insurance against future instability in China.
“In all cases it will make it easier for investors to travel to Europe without the need to go through a complicated, lengthy visa application process.

“Out of the other areas that are currently offering similar schemes, Cyprus has lost a lot of credibility recently due to its banking crisis and Portugal is still regarded as Spain’s poorer cousin.

“The investment limits in the UK and France are much higher and Spain offers a much better year-round lifestyle. It will make the prospect of investing in Spanish property far more attractive to the wider global community and, as a result, will improve national confidence, which is much needed.”

Naturally, it is expected that the areas of the country, such as Madrid, Barcelona, Ibiza and Mallorca, which have traditionally attracted high-end buyers will be those most likely to do well from this government initiative.
With this theory in mind, in southern Spain, it is probable that Marbella, which has been synonymous with a jet-set lifestyle since the 1960s, will receive a boost to its real estate sector.

“Marbella and Puerto Banús as well as other affluent areas offering desirable properties with a good potential rental income will benefit from the new residency law. Properties within luxury residential complexes, ski chalets in the Sierra Nevada, country houses in national parks, and historic buildings within cities popular with tourists, such as Seville and Granada, will be most in demand.”

Extracted from The Sur in English 

An influx of tourists in Malaga

More than 300,000 passengers used Malaga-Costa del Sol Airport between Wednesday (14th August) and Monday (19th August), according to the Spanish Airport authority, AENA.

In what has been one of the busiest weeks of the year so far for the airport, 1,782 flights landed or took off, with 385 of them doing so on Saturday (17th August) – Saturday’s flights alone carried approximately 66,000 passengers. The second most active day was Friday (16th August), when 357 flights brought or took some 59,000 people through the terminals’ doors.

Of course, it is no surprise that passenger figures spike in the summer months, especially in August when schools and many workplaces throughout Europe, as well as other parts of the world, are closed or operating on reduced hours.
Similarly, these released figures from AENA relate to a period in which there is a national bank holiday and in which the highly anticipated annual Malaga fair is taking place.

With so many tourists flying in over the last few days, recently arrived returning passengers were asked what keeps on drawing them here. Everyone, without fail, who was polled, cited the climate as a major motivation for visiting this part of southern Spain.

Kath Adams who flew in from Dublin says: “We come to stay for a week every year in Marbella – although this year we’re slightly later than usual as we’ve coincided the holiday with my sister’s birthday. What keeps us coming back is the weather - you’re almost guaranteed sunshine here and we’re all sun worshippers and love the heat.”

It is a view shared by British holidaymaker, Clive Raddon. “It’s almost the nearest place to home where you’re always going to get sun, isn’t it? It’s always lovely and hot in Malaga,” he comments.

But whilst many northern European visitors are coming to Malaga specifically for their love of the warmth, many domestic tourists are flying in to escape it. Félix Rios, from Madrid, explains: “It’s just too hot in the capital, it’s good to get away in August. And whilst it’s still quite hot here there’s always the sea and it’s a bit breezier.”

But, naturally, it wasn’t just the weather that passengers highlighted as reasons for visiting.
“This is our fourth holiday here. The reason why we chose to come back this time was because there’s now a familiar feel to the place; we know where things are, and so we can hit the ground running. We don’t need to spend time exploring where the best beaches or restaurants are, as we already know. This is important as we’ve got three young kids,” says Nikki Allnutt from Norfolk, UK.

“Also - and I don’t want to sound like a heathen - but there’s lots of English products available for the children as they’re quite fussy eaters, most people speak English here so you order things easily and get about OK, and also there’s lots of other English people to meet and mix with - as we don’t speak Spanish. I know it’s [a holiday that is] not going outside of my comfort zone, but that’s alright too!”

Others told that, besides the weather, it is the Costa del Sol’s sheer variety that is one of the major attractions.

Georgia Edwards, who arrived from London with two of her best friends, sums it up. “There are lots to do and see here – and each area of the coast can offer something different, there’s a different ‘buzz’ in each town really, a different reason to go there.

“And on top of that, there’s so much variety within each area too. In Malaga [city] you can visit the beautiful old cathedral – do the historical thing - and then walk straight to the beach.”

“There are brilliant sports facilities, national parks, beaches of all kinds, a massive choice of nightlife from the wild to the intimate, lots of cultural activities – the list is endless – so it’s not surprising it appeals to so many different kinds of people of all ages and from all over the world.”

Extracted from The Sur in English