Spain - Commercial Guide
Market Overview

Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.

Last published date: 2020-08-07
  • At the time of writing, the economic and commercial effects in Spain of the global health crisis continue to evolve.  As such, the second half of 2020, and possibly beyond, will bring an ever-changing and unpredictable economic and commercial environment as the Spanish and global economies continue to address the repercussions of the global health crisis.   Therefore, it will be more important than ever to monitor current local developments and consult with on-the-ground experts, including this office, to assess changing opportunities and challenges. 
  • For illustrative purposes, prior to the 2020 international healthcare crisis, the International Monetary fund (IMF) projected GDP growth for Spain at 1.6 percent for 2020.  However, in the June 2020 edition of the World Economic Outlook, the IMF forecast a contraction of Spain’s economy of 12.8 percent in 2020, and then recovery of 6.3 percent in 2021.
  • The healthcare crisis notwithstanding and despite the ups and downs of Spain’s political and economic landscape over the last few years, the country remains a vital partner for the United States, both bilaterally and within the European region.  Spain leads the way in Europe on Latin America, which can provide strategic synergies for U.S. exporters engaged in both Spain and Latin America.  Spain’s diversified economy and its growing digital industry also offer key opportunities for furthering U.S.-Spain bilateral trade and investment. 
  • Spain concluded municipal, regional and European elections in the Spring of 2019, and its presidential elections in November 2019.  Spain’s Socialist Party (PSOE), counting on the support of several non-traditional government partners, took control of the government in June 2018, ousting Spain’s center-right Popular Party (PP) from power in a no-confidence vote; since November 2019, PSOE has led a coalition government with the far-left Podemos party, and the support of most of parties that sustained the aforementioned no-confidence vote against PP.  The PSOE-led government has been unable to garner enough support to pass national budgets for 2019 and 2020; as of the preparation date of this report, Spanish authorities were preparing the draft budget for 2021. The government must balance its ambitions to increase public spending with the fiscal realities of Spain’s economic slump, as both growth and government revenues have dropped precipitously as a result of the global pandemic.
  • The PSOE-Podemos government is likely to continue to pursue policies that favor workers, expand social services, reduce socioeconomic inequalities, facilitate a transition to a green economy, and spur innovation and entrepreneurship.  However, some proposals, such as increasing taxes on financial corporations and wealthy individuals and repealing previous labor market reforms, could put downward pressure on growth if mishandled. 
  • Political tensions between Spain’s central government and the Catalonia region remain high, stoked by the unconstitutional October 2017 independence referendum.  However, there has been little to no negative impact for U.S. companies exporting to Spain, and Catalonia remains one of the principal economic regions within Spain.  
  • As a member country of the European Union (EU), Spain adheres to EU legislation, as is the case of all member countries. The Spanish government generally aligns with the EU consensus, and the Spanish public has broadly favorable views of the EU.
  • Spain, with a GDP of USD 1.3 trillion and a population of 47 million people, is the fourth-largest economy in the Eurozone. Spain’s economy grew 1.8 percent in 2019 and 2.6 percent in 2018, exceeding the Eurozone average.  As mentioned above, with the yet-to-be-determined economic impact of the global health crisis on Spain, it will be more important than ever to seek out the most up to date information on the current state of economic development.
  • It is important to note that Spain has recent experience lifting itself from economic despair.  Spain experienced a prolonged recession that lasted from 2008 through the third quarter of 2013, the result of subsequent real estate and financial crises. Thanks to austerity measures taken between 2011 and 2013 to reduce the deficit and reforms to labor laws, public services, and the financial sector, Spain’s economy is better diversified and more cost competitive.
  • Spain has a structurally high unemployment rate, which economists estimate to be between 8 and 12 percent. As a result of the 2008-2013 economic crisis, Spain’s unemployment rate ballooned to nearly 27 percent in 2013 but steadily decreased to 13.8 percent in 2019.  The current healthcare crisis has had a dramatic impact on the unemployment rate in all segments of the active population.  The latest official rate for the first quarter of 2020 stands at 14.4 percent, with youth unemployment (under 25 years of age) at 33 percent.  Registered unemployment (those people registered as unemployed with the government employment office) shot up 9.3 percentage points from February to March, the highest monthly rise in Spain’s history, and economists expect unemployment to reach 20 percent or higher by 2021. 
  • Spain has traditionally represented a significant export market for the United States. According to the U.S. Department of Commerce, U.S. exports of goods to Spain in 2019 amounted to USD 15 billion, up from USD 13.11 billion in 2018.  Actual U.S. exports to Spain are substantially higher than the reported numbers, since many of Spain’s imports from the U.S. arrive via ports of entry in other European countries. Spanish exports to the U.S. in 2019 were USD 16.7 billion. Services exports from the U.S. to Spain continued to be strong at USD 6.94 billion in 2018.
  • Investment plays a key role in the bilateral economic relationship.  Many of the largest U.S. companies are present in Spain, many of which are in the industrial sector – automobiles, chemicals, pharmaceuticals, industrial machinery, etc.  According to the Spanish Ministry of Industry, Trade, and Tourism, accumulated U.S. investment in Spain was estimated at Euros 64.6 billion in 2017. The Secretariat for Trade indicates that the gross investment flow from the United States in 2019 (Euros 3.7 billion) reflects a decrease of 57.4 percent over the Euros 8.7 billion in 2018. It is estimated that U.S. firms in Spain employ over 163,000 people.
  • The presence of large well-known foreign companies serves as a catalyst for innumerable local suppliers and service providers and, in almost all cases, increases exports. Over 50 percent of Spanish exports are made by foreign multinationals located in Spain. U.S. investors also hold significant portfolio investment in shares of some of Spain’s largest companies.
  • Spanish foreign direct investment increased as Spain’s economy recovered from the 2008-2013 crises. Spanish investments in the United States increased substantially in recent years, making Spain the 10th largest investor in the United States in 2019, according to data from SelectUSA and the U.S. Bureau of Economic Analysis. Much of the investment has taken place in the past nine years, growing from a stock of USD 14 billion in 2006 to approximately USD 84.3 billion in 2019 (by Ultimate Beneficial Owner).  Spanish-owned U.S. subsidiaries contributed more than USD 143 million in R&D, supported 84,100 jobs and accounted for USD 1.6 billion in exports from the U.S. in 2017.   According to data from ICEX - the Spanish Institute of Foreign Trade and Investment (Ministry of Industry, Trade, and Tourism,) the United States was the principal destination of FDI from Spain in 2019 (23 percent), ahead of destinations such as France (18.5 percent), Brazil (9.3 percent), the United Kingdom (6 percent), Luxembourg (5.7 percent), and Argentina (5.6 percent.