According to a new report issued by the New York-based investment bank’s economics research arm, Spain’s economy “still needs significant economic restructuring”, and part of this restructuring must come from a reallocation of capital, away from “unhealthy sectors such as construction, to those sectors with better prospects of expansion, such as exports”.
In the meantime, even though house prices have fallen by around 30% from their peak, “an overhang of properties was accumulated that the Bank of Spain has estimated at between 700,000 and 1m properties”, which the Goldman Sachs economists say is one of the reasons they believe that "equilibrium prices are still 10% below the current level”.
The release of the Goldman Sachs report came in the wake of a forecast by the Spanish government that the country’s economy was expected to contract this year by amost three times more this year than originally projected, and another report which revealed Spain’s unemployment rate had touched 27.2% for the first time in the first quarter.
It also preceded by a matter of days today’s deadline for reporting any overseas assets worth more than €50,000 to the Spanish tax authorities.
As reported, this measure was brought in last year as part of the Spanish government’s efforts to obtain more in tax revenue from those residents it regards as best able to afford to pay it.An estimated 200,000 British expatriates are said to be affected by this new law, which reportedly has angered some so much that they are petitioning the EU, on the grounds that it is discriminatory.
The penalty for not declaring, or errors in making the declaration, is as much as €10,000.
A detailed explanation of the new law may be found on the Blevins Franks website, at www.blevinsfranks.com.