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7. Foreign 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, Spain is ranked 17th in the world as an exporter and 15th as an importer; while in the trading of services it occupies 11th place as an exporter and 18th place as an importer15.

Spanish exports and imports of goods account for 1.8% and 2%, respectively, of the worldwide total, while Spanish exports and imports of services represent 2.6% and 1.5% 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 2019 (as a % of total)
Exports
Imports
Capital goods20.4%Capital goods21.3%
Food16.8%Chemical products15.8%
Automobile industry15.2%Energy products13.8%
Chemical products14.5%Automobile industry12.5%
Semi-manufactured non-chemical products10,2%Consumer goods12.0%
Consumer goods10.1%Food11.1%
Energy products7.3%Semi-manufactured non-chemical products7.1%
Raw materials2.4%Raw materials3.2%
Durable consumer goods1.6%Durable consumer goods2.6%
Other goods1.5%Other goods0.4%
Source: Ministry of Industry, Trade and Tourism. January – December 2019 data.

As would be expected, the countries of the EU are Spain’s main trading partners. Accordingly, during 201916, Spanish exports to the European Union accounted for 65.7% of total exports and sales to the Eurozone represented 51.5%. Imports from the European Union accounted for 53.8% of the total and those from the Eurozone represented 42.7%.

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 65.7% of total exports in 2019.

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

Specifically, among the sovereign countries, Spain is the 11th largest recipient of foreign investment worldwide in terms of stock (and 6th in the EU) with USD 751,510 million. Spain is the 13th largest source of FDI in terms of stock, with a volume equal to USD 606,549 million in 201917.

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), as well as financing lines for investment in the electronics, information technology, communications and infrastructure concessions sectors, not to mention the 2020 ICO International Facility and the 2020 ICO-Exporters Facility. Along these lines, the Spanish Economy Internationalization Strategy 2017-2027, together with the biennial Action Plans (for 2017-2018 and 2019-2020) was approved, its aim being to maximize the contribution of foreign investment to growth and to job creation, as well as to the improvement of competitiveness. This is the medium/long-term strategic framework for planning policies to support internationalization, facilitating the coordination of the various players involved and improving companies’ access to the various support instruments. The biennial plans implementing it seek to bring it into line with the changing circumstances that condition Spanish foreign trade.

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)
 20182019
I. Current account23,28424,899
Goods and services32,62235,155
Primary and secondary income-9,338-10,256
II. Capital Account5,7684,072
III. Financial Account31,28633,834
Total (excluding Bank of Spain)45,53519,020
Direct investment-15,18710,478
Portfolio investment12,991-50,405
Other investment46,14867,121
Financial derivatives1,583-8,174
Bank of Spain-14,24914,814
Reserves2,182675
Claims with the Eurosystem-9,48720.533
Other net assets-6,945-6,394

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

15WTO “World Trade Statistical Review 2019”.

16Annual data published by the Spanish Ministry of Industry, Trade and Tourism. January – December 2019 data.

17According to the UNCTAD “World Investment Report 2019".