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flag Spain Spain: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

After undergoing a period of deep recession, Spain returned to positive growth in Q3 of 2013. However, the average growth numbers for the year were negative (-1.3%) and only sluggish growth is expected for 2014 (0.7% of the GDP). Recovery will be slow due to the high level of unemployment and tightened credit conditions which limit investment and consumption.

In 2013, the government continued introducing reforms to rebalance the state accounts and it was able to soften the austerity measures thanks to the EU's losening of its requirements in terms of deficit reduction (the goal was increased from 4.5% to 6.5% and Spain was given additional two years to reduce its budget under 3% by 2016). The country experienced an increase in competitiveness encouraged by the decreasing cost of workforce and investors became more confident, which resulted in lower interest rates on the sovereign debt. In late 2013, the government announced that it was closing down its assistance plan for banks since the last visit of the IMF inspectors came to the conclusion that the restructuring programme of the bank sector had had good results. To support this nascent economic recovery a number of reforms are due to be adopted, including and especially, of the pension system (abolishing indexation on inflation, revision of retirement age according to life expectancy), enterpreneuriship (standardisation of business creation rules and trade licensing, facilitating bureaucratic procedures and access to funding) and public spending (administrative reform). The debt has risen to 94% of the GDP and should reach nearly 99% of the GDP in 2014.

Spanish unemployment rate has fallen due to the decrease in active population and the creation of new temporary jobs, but still remains very high (25%). The crisis has had a negative impace on the living conditions generally.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 1,455.871,323.211,358.691,400.481,421.71
GDP (Constant Prices, Annual % Change) 0.1-1.6-1.2e1.3e1.7
GDP per Capita (USD) 31,15128,29429e30,113e30,639
General Government Balance (in % of GDP) -7.3-4.9-3.8e-3.4e-2.9
General Government Gross Debt (in % of GDP) 70.585.993.9e98.6101.1
Inflation Rate (%) 3.12.41.5e-0.00.6
Unemployment Rate (% of the Labor Force) 21.424.826.124.623.5
Current Account (billions USD) -54.22-15.9710.581.40e5.21
Current Account (in % of GDP) -3.7-1.20.80.10.4

Source: IMF - World Economic Outlook Database , Last Available Data

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.

Tourism represents Spain's largest source of income and the country has become the number two tourist destination in the world, thereby stimulating export of goods and services. The tertiary sector contributes to two thirds of the GDP.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.4 20.7 74.9
Value Added (in % of GDP) 2.8 23.3 73.9
Value Added (Annual % Change) 15.6 -3.6 -1.1

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.720.760.720.780.76

Source: CIA - The world factbook - Last Available Data.

 
 

Learn more about Market Analyses about Spain on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
67.2/100
Position:
Moderately Free
World Rank:
49/178
Regional Rank:
22/43

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
7.36
World Rank:
25/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Trade represents nearly 60% of the Spanish GDP (WTO, average 2010-2012). In 2013, Spanish imports bottomed out and exports recovered (an increase of around 6% compared to 2012), driven by equipment goods, the automobile industry and tourism, the decrease in costs and the diversification of trading partners. Spain has reduced its trade deficit and this trend should continue in 2014.

The main trade partners are the countries of the European Union, France being the first destination of Spanish exports. France imports Spanish food products, cars, chemical and textile products. Spain also has good trade relations with the Maghreb countries.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 293,218327,016376,606337,338338,843
Exports of Goods (million USD) 227,338254,418306,551293,939315,518
Imports of Services (million USD) 86,67987,18794,74689,92291,126
Exports of Services (million USD) 121,517123,823142,328136,963144,452
Imports of Goods and Services (Annual % Change) -18.36.9-0.8-6.3-0.5
Exports of Goods and Services (Annual % Change) -11.09.47.41.24.3
Imports of Goods and Services (in % of GDP) 23.826.829.028.828.1
Exports of Goods and Services (in % of GDP) 22.725.528.830.331.6
Trade Balance (million USD) -57,880-63,278-59,276-33,496-15,055
Trade Balance (Including Service) (million USD) -23,142-26,961-11,03612,22738,713
Foreign Trade (in % of GDP) 46.552.357.859.159.7

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
France 16.1%
Germany 10.1%
Portugal 7.5%
Italy 7.0%
United Kingdom 6.7%
See More Countries 52.7%
Main Suppliers
(% of Imports)
2013
Germany 11.1%
France 10.9%
China 6.9%
Italy 5.8%
United States 4.1%
See More Countries 61.2%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 9.4%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 5.3%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 3.5%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.1%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 1.7%
See More Products 77.0%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 13.6%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 5.2%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 4.3%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 4.2%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.4%
See More Products 69.3%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2011
42.09%
24.18%
16.78%
4.71%
3.72%
2.99%
1.62%
1.53%
0.96%
0.75%
0.67%
- bn USD of services imported in 2011
35.61%
25.18%
18.27%
5.30%
3.28%
2.99%
2.94%
2.24%
2.18%
1.60%
0.41%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Treasury Department
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
Yahoo Espana
Icex
Buscopio
Gomera
Hispa Vista
Hotbot Spain
Ozu.es
Sharelook.es
Sol
Telepolis
Terra
Wanadoo.es
Economic Portals
Invertia

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Political Outline

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 of State 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 allotted 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 government 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 unicameral 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: FELIPE VI (since 19 June 2014), hereditary.
President of the government and Prime Minister: Mariano RAJOY (since December 2011), PP.
Next Election Dates
Senate: November 2015
House of Deputies: November 2015
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
35/180
Evolution:
1 place up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: January 2015