Business Environment in Spain
Spain has achieved an economic leap in the last two decades and has risen to be amongst 20 of the world's most significant economies. It registered annual GDP growth rates higher than 4% between 1997 and 2000 and thereafter a growth rate that is always higher than the average in the Euro zone due to consumption and to the real-estate "boom". Nevertheless, the growth factors, which were at the root of its economic growth have been weakened by the financial crisis, which touched the real-estate sector and weakened the banking system. In 2009, the GDP growth fell by 3.7%, putting an end to 16 subsequent years of positive economic growth.
The government’s stimulus policies did not prevent a rise in unemployment, which increased to as high as 18% of the active population, the highest rate in the European Union in 2009. The labour market reform which came into operation in 2010 has nevertheless helped increase the productivity of the Spanish economy. Both the construction sector and to some extent consumption were hit by the economic crisis. Although inflation is showing a tendency towards stabilization, household consumption predictions remain bleak for 2011.
Many companies are in trouble or are closing down, especially in real-estate, construction and public works sectors. Outstanding debts of companies as well as families have increased by 12% in figures but by 61% in value.
In 2010, Spain turned towards a different economic model, freeing itself from real estate as its traditional growth factor and capitalizing on improved competitiveness and a higher added value on services. With an increase of 22.4% on its quarterly net profits, Spain’s number one bank Santander reflects the country’s ambition to resist the economic downturn.
|GDP (billions USD)||1,467.89||1,409.95e||1,484.71||1,524.06||1,563.63e|
|GDP (Constant Prices, Annual % Change)||-3.7||-0.1||0.8||1.6e||1.8e|
|GDP per Capita (USD)||32,030||30,639e||32,176e||32,947e||33,730|
|General Government Balance (in % of GDP)||-9.0||-7.5e||-4.7||-4.6||-4.4|
|Inflation Rate (%)||-0.2||2.0||2.6||1.5e||1.4e|
|Unemployment Rate (% of the Labor Force)||18.0||20.1||19.4e||18.2||17.1e|
|Current Account (billions USD)||-74.14||-75.04e||-72.97||-73.60e||-|
|Current Account (in % of GDP)||-5.1e||-5.3e||-5.1e||-5.0e||-|
Source: IMF - World Economic Outlook Database
Note: (e) Estimated Data
Main Sectors of Industry
Agriculture contributes around 3% of the Spanish GDP. The country produces wheat, sugar beet, barley, tomatoes, olives, citrus fruits, grapes and cork. It is the world's largest producer of olive oil and the world's third largest producer of wine. It is the largest producer of lemons, oranges and strawberries. Spain has limited mineral resources.
The manufacturing industry is dominated by textiles, industrial food processing, iron and steel, naval machines and engineering. The new sectors such as relocation of the production of electronic components, information technology and telecommunications provide a high growth potential. In 2009, industrial production growth rate nevertheless fell by 10.2%.
Tourism represents Spain's largest source of income, having become the second tourist destination of the world and thereby stimulating export of goods and services. The tertiary sector contributes to 2/3 of the GDP.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||4.3||27.8||67.9|
|Value Added (in % of GDP)||2.7||26.2||71.2|
|Value Added (Annual % Change)||1.0||-10.3||-0.9|
Source: World Bank - Last Available Data.
|Euro (EUR) - Average Annual Exchange Rate For 1 USD||0.80||0.80||0.73||0.68||0.72|
Source: World Bank
Indicator of Economic Freedom
- Mostly free
- World Rank:
- Regional Rank:
Foreign Trade in Figures
Foreign trade has little impact on the country’s GDP growth. The Spanish trade deficit worsened in 2009 and 2010. Although imports fell by half in 2009, exports too lacked vigor. The energy bill reached EUR 41.8 million, which is almost 15% of the total imports. Nevertheless, its burden decreased because of the drop in Brent future price and the increase in the production of renewable energy. Apart from food products (e.g.: fruits and vegetables) whose balance remains in surplus, there is a negative balance for other items, which shows that Spain is loosing its competitiveness.
The main trade partners are the countries of the European Union, France being the first destination of Spanish exports (19.2% in 2009). France imports Spanish food products, cars, chemical and textile products. Spain also has good trade relations with the Maghreb countries.
|Foreign Trade Indicators||2006||2007||2008||2009||2010|
|Imports of Goods (million USD)||328,696||389,301||420,804||293,218||312,228|
|Exports of Goods (million USD)||213,717||253,297||281,493||227,338||244,527|
|Imports of Services (million USD)||77,860||95,688||104,036||86,679||85,500|
|Exports of Services (million USD)||105,501||126,747||141,750||121,517||120,846|
|Imports of Goods and Services (Annual % Change)||10.2||8.0||-5.3||-17.8||-|
|Exports of Goods and Services (Annual % Change)||5.1||5.3||-||-||-|
|Imports of Goods and Services (in % of GDP)||32.7||33.6||32.2||25.6||-|
|Exports of Goods and Services (in % of GDP)||26.3||26.9||26.5||23.4||-|
|Trade Balance (million USD)||-104,622||-125,238||-128,285||-62,833||-|
|Trade Balance (Including Service) (million USD)||-76,545||-93,733||-90,712||-||-|
|Foreign Trade (in % of GDP)||59.0||60.6||58.7||49.0||-|
Source: WTO - World Trade Organization ; World Bank
Main Partner Countries
(% of Exports)
|Other partnersClose extended list||45.9%|
(% of Imports)
|Other partnersClose extended list||55.8%|
Sources of General Economic Information
Ministry of Industry, Tourism and Commerce
Ministry of Environment, rural and marine environment
- Statistical Office
National Statistical Institute
- Central Bank
Bank of Spain
European Central Bank
- Stock Exchange
Spanish stock markets
- Search Engines
- Economic Portals
- Executive Power
- The King is the Head of the State and the commander-in-chief of the army; his role is mostly ceremonial. Following legislative elections, the leader of the majority party or the majority of the coalition is appointed Prime Minister by the Sovereign then elected by the parliament for a 4 year tenure. The Prime Minister is the head of the government. He is also called the President of the Government. He holds executive power which includes the execution of the law and the management of the routine affairs of the country. The Council of Ministers is appointed by the king on the recommendation of the Prime minister. There is also a Council ofState which enjoys the role of the supreme consulting body of the government. But its recommendations are not binding.
The President of each Autonomous Community is from the majority party of the majority coalition winning elections of the Parliaments of the Regions which take place every 4 years. the President forms a government whose «ministers» are appointed under the title «consejeros» and seconded by a cabinet and director generals, etc. who are in charge of each Department heading the sectors for which the Autonomous Community has jurisdiction in substitution of the Spanish State (single administration).
- Legislative Power
- The legislative power is bicameral. The Parliament, called Cortes Generales, is made up of:
- The Senate which has 264 seats. Its role is that of representing the territories (Autonomous Communities and Departments). The senators are elected by universal suffrage for 4 years.
- Congress of Deputies which has a minimum of 300 seats and a maximum of 400 (currently 350). The deputies are elected by universal suffrage for 4 years from departmental constituencies. There are alloted one minimum representation and the remaining is proportional to their population. To avoid splitting up which is harmful to the stability of the Chamber, the D’Hondt system is applied.
The executive wing of the government depends directly or indirectly on the parliament's support, often expressed by a vote of confidence. The legislative power belongs to the governement and the two houses of parliament at the same time. The Prime Minister does not have the authority to dissolve the parliament directly, but he can recommend its dissolution to the king. The Spanish citizens enjoy considerable political rights.
The 17 Autonomous Communities also have a legislative power exercised by their monocameral Parliament within the limit of jurisdictions fixed by each of their Statutes.
- Main Political Parties
- Although Spain has a multi-party system, there are above all two dominant parties. The regional parties can be powerful within the Autonomous Communities, which makes them essential to form coalition governments. The two most important parties of the country are: the
PSOE (Spanish Workers Socialist Party), a democratic socialist party, and the second oldest party, and the
PP (People's Party), which is the largest liberal conservative party of Spain. The other important parties are:
- The IU (United Left), a coalition of left parties around PCE (Spanish Communist Party);
- The CiU (Convergence and Union), a conservative and nationalist party based in Catalonia, which supports market economy;
- Le PNV (Basque Nationalist Party), a centre-right political party based in Basque Country.
- Current Political Leaders
- King: Juan Carlos I (since November 1975), heriditary.
President of the government and Prime Minister: Jose Luis Rodriguez Zapatero (took oath in April 2004 and re-elected in March 2008), PSOE.
- Next Election Dates
- Senate: March 2012
House of Deputies: March 2012
Indicator of Freedom of the Press
- World Rank:
- 6 places down compared to 2008
Indicator of Political Freedom
- Political Freedom:
- Civil Liberties:
Any Comments About This Content? Report It to Us.
This report provides guidance to U.S. companies interested in exporting high-value consumer-ready food products to Spain and includes an overview of the country's economic situation, market structure.
Foreign Agricultural Service on 18 Feb 2013 related to Business Environment in Spain
•All EU member states adopt common external trade policy and measures, which affect their trade relations with other countries.
Hong Kong Trade Development Council (HKTDC) on 30 Sep 2012 related to Business Environment in Spain
The Spanish economy, after experiencing two consecutive years of negative growth, triumphed last year with a humble GDP expansion of 0.7%.
Hong Kong Trade Development Council (HKTDC) on 30 Jul 2012 related to Business Environment in Spain
Recent rains were helpful for the crop development, but will fall far short of making up for lack of rain during winter and early spring in particular in the Southern and Eastern grain producing regio
Foreign Agricultural Service on 13 May 2012 related to Business Environment in Spain
2012 Country Commercial Guide for U.S. Companies doing business in Spain.
U.S. Commercial Service Poland on 27 Apr 2012 related to Business Environment in Spain
For the past several years, Spain was one of the European Union’s best economic performers. It enjoys a long-standing and wide-ranging bilateral relationship with the United States and has traditionally provided a healthy export market.
U.S. Commercial Service Poland on 23 Feb 2010 related to Business Environment in Spain
Find the related Spanish companies with Kompass:
Internationalization Consulting, BrazilHow2Go specializes in bilateral internationalization of companies from Europe and America, formed by a team of...
Part of USDA, the United StatesThe Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA) works to improve foreign market...
Government Trade Promotion, Hong Kong SAR
U.S. Department Of Commerce, Spain
U.S. Department of Commerce, France