Spain: Selected Issues. 2011 International Monetary Fund July 2011
IMF Country Report No. 11/216. Prepared by Jerome Vacher, Keiko Honjo and Florence Jaumotte (all EUR), Rafael Romeu (FAD), Alessandro Giustiniani (MCM), and Edouard Vidon (SPR)
“The paper focuses on two major private sector internal imbalances: (i) the excessive weight of construction and real estate, and (ii) the excessive leverage in the economy. In the case of Spain, three imbalances are commonly identified, including by Spanish authorities: (i) excessive weight of residential real estate in GDP, (ii) rapid expansion of credit and leverage in the private sector, and (iii) current account deficits. This paper deliberately leaves out adjustment in the public sector (which can be seen as a response to the initial private sector imbalances) and the external aspects of adjustment (which can be seen as the flipside of private domestic imbalances).”
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