Economic problems

• Spain was not as industrialized as other countries
• • Spanish industrial development lagged behind
  • some regions (nothern spain) industry was more advanced
  • Catalonia - booming textile industry, which led to foreign trade.
  • Spanish economy was predominantly agricultural - 46% of the spanish workforce worked on farms
• • Poverty = widespread
  • little domestic demand for industrial goods and therefore little stimulus for economic development
• • wages = very low and there was little state help to protect the poor from extreme poverty
• • infrastructure and sanitation was very poor quality
• • previous gov had borrowed large sums of money - republic inherited a significant budget deficit
• • Spain was badly affected by the Great Depression - falling exports and declining industrial production.
  • unemployment rose:
  • 1931 - 400,000
  • 1933 - 600,000
  • unemployment was much worse in rural areas. 65-70% of Spains unemployed lived in rural areas
• • Peseta = devalued which reduced confidence in Spain's economy
  • 1928 - stood at 29.50 against Sterling
  • 1930 - reached 42.10