Spain's capitalist mixed economy is the ninth largest worldwide and the fifth largest in Europe. It is also the third largest world investor.
The centre-right government of former prime minister José María Aznar worked successfully to gain admission to the group of countries launching the euro in 1999. Unemployment stood at 7.6% in October 2006, a rate that compared favorably to many other European countries, and especially with the early 1990s when it stood at over 20%. Perennial weak points of Spain's economy include high inflation, a large underground economy, and an education system which OECD reports place among the poorest for developed countries, together with the United States and UK.
However, the property bubble that begun building from 1997, fed by historically low interest rates and an immense surge in immigration, imploded in 2008, leading to a rapidly weakening economy and soaring unemployment. By the end of May 2009 unemployment already reached 18.7% (37% for youths).
Before the current crisis, the Spanish economy was credited for having avoided the virtual zero growth rate of some of its largest partners in the EU. In fact, the country's economy created more than half of all the new jobs in the European Union over the five years ending 2005, a process that is rapidly being reversed. The Spanish economy has been until recently regarded as one of the most dynamic within the EU, attracting significant amounts of foreign investment.
The most recent economic growth benefited greatly from the global real estate boom, with construction representing an astonishing 16% of GDP and 12% of employment in its final year. According to calculations by the German newspaper Die Welt, Spain was on course to overtake countries like Germany in per capita income by 2011. However, the downside of the now defunct real estate boom is a corresponding rise in the levels of personal debt: as prospective home owners struggled to meet asking prices, the average level of household debt tripled in less than a decade. This placed especially great pressure upon lower to middle income groups; by 2005 the median ratio of indebtedness to income had grown to 125%, due primarily to expensive boom time mortgages that now often exceed the value of the property