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Spanish economic revival tempts expat investors
| Published: | 23 Aug at 6 PM |
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Ten years ago, Spain was in crisis, but now its economy is soaring to new heights. I
n 2008, the main topic of expat conversation in bars and restaurants was ‘la crisis’, and with very good reason. Bad debts due to the credit-fuelled construction boom had caused a spectacular fall in real estate prices, the global financial crisis was destroying small businesses and banks were collapsing under the pressure of one of the worst downturns in European financial history. Desperate expat property owners were simply handing their banks the keys and leaving the country.
Nowadays, it’s a completely different story. In 10 short years, the Spanish economy has seen a remarkable recovery aided by a massive growth in the values of financial institutions and banks as well as energy companies. This year, the IBEX 35 has soared by 19.66 points to date and unemployment has now fallen from 26 per cent of the population to a much improved 17.1 per cent, still high but moving in the right direction. As a result, economic growth has been steady at around three per cent over the past two years and is on track for 2017 as well, possibly allowing Spain to reduce its bloated national debt.
Provided everything pans out in the end as regards Brexit, established expats and would-be UK retirees happy with taking a longer-term view may feel now is the time to invest in Spain. The majority of incomers leave their funds in sterling and choose UK assets as an investment, in spite of the fact they need euros to pay for their desired lifestyle. Taking into account the recently predicted further fall in sterling’s value, possibly to below parity, investing in your country of residence might seem like a good idea.
Linking the improvement in Spain’s economy to an improvement in your own financial circumstances seems a sensible idea for those with a healthy nest egg. Investment funds which invest either partly or wholly in the Spanish stock market via a European fund can produce good results, but it’s important to understand what you’re being offered and ensure it’s tailored to your requirements. QROPs are another option for those with work-related pension schemes and are considered tax-efficient.
n 2008, the main topic of expat conversation in bars and restaurants was ‘la crisis’, and with very good reason. Bad debts due to the credit-fuelled construction boom had caused a spectacular fall in real estate prices, the global financial crisis was destroying small businesses and banks were collapsing under the pressure of one of the worst downturns in European financial history. Desperate expat property owners were simply handing their banks the keys and leaving the country.
Nowadays, it’s a completely different story. In 10 short years, the Spanish economy has seen a remarkable recovery aided by a massive growth in the values of financial institutions and banks as well as energy companies. This year, the IBEX 35 has soared by 19.66 points to date and unemployment has now fallen from 26 per cent of the population to a much improved 17.1 per cent, still high but moving in the right direction. As a result, economic growth has been steady at around three per cent over the past two years and is on track for 2017 as well, possibly allowing Spain to reduce its bloated national debt.
Provided everything pans out in the end as regards Brexit, established expats and would-be UK retirees happy with taking a longer-term view may feel now is the time to invest in Spain. The majority of incomers leave their funds in sterling and choose UK assets as an investment, in spite of the fact they need euros to pay for their desired lifestyle. Taking into account the recently predicted further fall in sterling’s value, possibly to below parity, investing in your country of residence might seem like a good idea.
Linking the improvement in Spain’s economy to an improvement in your own financial circumstances seems a sensible idea for those with a healthy nest egg. Investment funds which invest either partly or wholly in the Spanish stock market via a European fund can produce good results, but it’s important to understand what you’re being offered and ensure it’s tailored to your requirements. QROPs are another option for those with work-related pension schemes and are considered tax-efficient.
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