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7Foreign trade and investment

Rapid growth in international trade and foreign investments in recent years has made Spain one of the most internationally-oriented countries in the world.

With regard to the trading of goods, in 2020 Spain was ranked 18th in the world as an exporter and 16th as an importer; while in the trading of services it occupies 14th place as an exporter and 20th place as an importer15.

Spanish exports and imports of goods account for 1.7% and 1.8%, respectively, of the worldwide total, while Spanish exports and imports of services represent 1.8% and 1.3% respectively.

The breakdown by industry of foreign trade is relatively diversified, as can be seen in the following table:

Table 7

DISTRIBUTION OF EXPORTS AND IMPORTS 2021 (as a % of total)
Exports
Imports
Capital goods18.6%Capital goods20.7%
Food18.0%Chemical products18.5%
Chemical products17.0%Energy products13.6%
Automobile industry12.8%Food11.5%
Semi-manufactured non-chemical products11.2%Consumer goods11.3%
Consumer goods9.6%Automobile industry9.5%
Energy products6.7%Semi-manufactured non-chemical products7.7%
Raw materials2.6%Raw materials3.6%
Other goods1.8%Durable consumer goods2.9%
Durable consumer goods1.7%Other goods0.6%
Source: Ministry of Industry, Trade and Tourism. January – December 2021 data.

As would be expected, the countries of the EU are Spain’s main trading partners. Accordingly, during 202116, Spanish exports to the European Union accounted for 61.8% of total exports and sales to the Eurozone represented 54.5%. Imports from the European Union accounted for 49.9% of the total and those from the Eurozone represented 42.4%.

Specifically, Spain’s leading trade partners are France and Germany. Outside the EU, Asia and Africa have displaced Latin America and North America from their traditional role as Spain’s main non EU trading partners.

The positive adaptation of Spanish companies to the new worldwide economic scenario, reflected mainly in the progressive diversification of the markets to which Spanish products and services are directed should also be underscored. Indeed, Spanish exports are to some extent being redirected from the EU to the rest of the world. In this regard, Spain’s share of exports to the EU dropped from 70.1% in 2007 to 61.8% of total exports in 2021.

As regards investment, Spain is one of the main recipients of investment worldwide.

Specifically, Spain is the 11th largest sovereign country recipient of foreign investment worldwide in terms of stock (and 5th in the EU) with USD 853,291 million. Spain is the 15th largest source of FDI in terms of stock, with a volume equal to USD 624,839 million in 202017.

With a view to making the Spanish economy more competitive and boosting the contribution made by foreign trade to growth and job creation, the Spanish government has adopted a series of measures aimed at enabling Spanish businesses to access the financing required for their internationalization. Noteworthy among the financial instruments approved by the Spanish government to provide official support for the internationalization of Spanish enterprise are the Foreign Investment Fund (FIEX), the Fund for Foreign Investment by Small and Medium-sized Enterprises (FONPYME) and the Enterprise Internationalization Fund (FIEM), which were allocated a total of €282 million in 2022 to channel the internationalization support and mentoring programs managed by the Spanish Chamber of Commerce. Also notable are the credit facilities for business owners and independent contractors offered by the Official Credit Institute (ICO) and approved in 2022: the 2022 ICO International Facility and the 2022 ICO-Exporters Facility.

In order to foster internationalization and the inflow of funds from the European Recovery Plan, a new €50 million non-refundable FIEM financing line has also been approved, allocated to the performance of sectoral and institutional modernization and feasibility studies on projects of interest for internationalization, for the period 2021-2023.

The ICO has also managed various funds for enterprises and independent contractors, aimed at palliating the economic impact of the crisis through the approval of ICO-COVID-19 lines of security to be used as liquidity and investment instruments, with a budget of up to 100 and 40 billion euros, respectively. Lastly, the Ministry of Industry, Trade and Tourism has submitted a “crash” program to combat COVID-19 with measures whose objectives are focused on mitigating the impact of COVID-19 on foreign trade, promoting an image of Spain associated with competitiveness and excellence in production and keeping the markets open, influencing the EU and multilateral forums such as the OMC, inter alia, against the risks of protectionism and preference for national consumption.

Along these lines, the Spanish Economy Internationalization Strategy 2017-2027, together with the biennial Action Plans (for 2017-2018, 2019-2020 and 2021-2022) was approved. The “Internationalization Support Action Plan 2021-2022” forms part of the Spanish Economy Internationalization Strategy 2017-2027, and its priority objectives are focused on the following three lines of action: (i) to configure the foreign sector as a pillar of growth and employment; (ii) to achieve greater resilience in the production and export fabric; and (iii) to promote a structural change in internationalized enterprises toward digitalization and sustainable development.

By way of a summary of Spanish foreign trade, the balance of payments is set out below.

Table 8

SPAIN’S BALANCE OF PAYMENTS (Millions of euros)
 20202021
I. Current account9,2518,429
Goods and services16,52817,057
Primary and secondary income-7,277-8,628
II. Capital Account4,4699,918
III. Financial Account17,25228,043
Total (excluding Bank of Spain)98,22811,557
Direct investment19,598-2,144
Portfolio investment53,675-14,590
Other investment32,04420,709
Financial derivatives-7,0907,582
Bank of Spain-80,97516,486
Reserves-34610,315
Claims with the Eurosystem-102,273869
Other net assets21,6445,302

N.B.: A positive sign in the current and capital accounts means a surplus (receipts greater than payments) and represents a net loan from Spain to the rest of the world (increase in assets or decrease in liabilities), whereas in the financial account a positive sign means a net inflow of capital and represents a net loan from the rest of the world to Spain. A negative sign in reserves means an increase.

Source: Bank of Spain. Data from January to December 2020 and 2021.

15WTO “World Trade Statistical Review 2021”.

16Annual data published by the Spanish Ministry of Industry, Trade and Tourism. January – December 2021 data.

17According to the UNCTAD “World Investment Report 2021".