Spain is the 14th largest economy in the world and the 4th largest economy in the European Union. It has a GDP of 1.2 trillion US dollars and a population of over 46 million people. The Spanish economy is highly diversified, with strong manufacturing and services sectors. The country is a major exporter of goods and services, primarily to other European countries with whom it has strong economic ties. Spain also benefits from its membership in the European Union, which allows for free movement of goods, capital and people across borders.
According to cheeroutdoor, the Spanish economy has been growing steadily for the past several years, driven by exports, an increase in foreign investment, and private consumption. The manufacturing sector contributes significantly to Spain’s GDP, with machinery and transport equipment being its main exports. Tourism is also an important contributor to Spain’s GDP, accounting for around 11% of total economic output in 2018. In addition to this, Spain is home to many leading companies such as Telefonica and Repsol which are major contributors to its economy as well as providing jobs for many people across the country.
The government has implemented various reforms over recent years aimed at improving Spain’s business environment and making it more attractive for foreign investment. These reforms have included reducing corporate taxes, increasing incentives for research & development activities as well as liberalising certain sectors such as energy production. Additionally, the government has invested heavily in infrastructure projects such as high speed rail networks which have helped improve connections between different regions within Spain itself as well as connecting it with Europe more broadly.
Business and Economics
Abbreviated as ESP by abbreviationfinder.org, Spain has in a relatively short time been transformed from a prominent agricultural country to an industrial and service country. It has been a member of the EU since 1986, which has in many ways affected and affected business and the economy. Contributions from EU structural funds, etc., accelerated the necessary restructuring and enabled major improvements in the country’s infrastructure. EU entry was followed by a sharp increase in imports, which resulted in large trade deficits. Inflation and interest rates also showed relatively high figures, and in connection with the international currency turmoil in the early 1990s, Spain was forced to devalue the then overvalued currency several times. The devaluation together with other export promotion measures, reduced taxes and cuts in the public sector resulted in strong economic growth until the mid-00s.
In 2007/08, housing prices fell and housing construction stalled at the same time as the country was hit by the international financial crisis. As a result, unemployment increased and private consumption decreased. In order to counteract the economic downturn that this entailed, the government implemented a series of stimulus measures in 2009, but despite this, GDP fell by 3 percent and unemployment continued to rise. In 2010 and 2011, the government then introduced a series of austerity and tax increases. In 2012, the government applied for € 100 billion of EU support loans to save Spanish banks’ loan losses.
During the period 2008–11, GDP fell by an average of about 2 percent annually and the budget deficit increased by an average of about 10 percent. During the same period, unemployment increased from 11 to 22 percent. The economic downturn has also hit the individual regions of Spain hard. As a result of reduced tax revenues, several regions have been forced to turn to the state for financial assistance. At the end of 2013 and the beginning of 2014, the Spanish economy showed some improvement, mainly as a result of increased exports. In 2013, the budget deficit was 6.9 per cent of GDP, which was just above the 6.5 percent target that the country negotiated with the EU. In 2014-16, the upturn continued and GDP increased by 2.6 percent in 2016.
|Year||Change in GDP (%)||Government debt share of GDP (%)||Budget deficit or budget surplus share of GDP (%)||Inflation (%)||Unemployment of total workforce (%)|
Source: IMF, OECD and World Bank
Spanish agriculture changed during the late 1900s, but the natural conditions with partly poor soils and dry climate and the existing ownership structure have slowed down even more significant change. Northern and northwestern Spain is characterized by large-scale fragmentation and very small farms (minifundios), while to the south of the Tajo River (Andalusia, Extremadura and La Mancha Plains) there are large estates (latifundios) that are usually used extensively and with inefficient methods. Only the areas on the Mediterranean coast and in the Ebro Valley have had a more developed agriculture, where, among other things, irrigation has been common.
About 56 percent of the country’s area is usable land. Agriculture, together with fishing and forestry, employed 4 percent of the workforce in 2010. Seeds are grown on half of the arable land, mainly barley and wheat. Maize is grown in Galicia and in irrigated areas, while rice is produced around Seville, Valencia and Tarragona. Sunflowers, which are grown in bands other than Andalusia and Castilla-La Mancha, occupy significant areas (8-10 percent). Sugar beets are an important crop (irrigation) in the Castilla y León region. Vegetables are grown in a total of about 500,000 ha; the largest areas are occupied by melons, onions (mainly garlic) and tomatoes, as well as bean and pea plants.
In Almería in southeastern Spain, whose climate is very dry and sunny, there is a capital-intensive and industrially organized cultivation of, among other things, tomatoes that takes place under plastic roofs and with a large amount of fertilizers and pesticides. Similarly, an export industry for strawberries has been built up in Huelva. However, the methods have caused environmental problems, and the water withdrawals have led to salt ingress into the groundwater.
Olive trees and grapes occupy 75 percent of the area for permanent crops. Spain is the world’s largest producer of olive oil and Europe’s third largest wine producer after Italy and France (see Spanish wines)
. Citrus fruits, mainly oranges, are grown in artificial irrigated areas in Valencia and Murcia, among others. Apples, peaches, figs, almonds and avocados are other products from the country’s extensive permanent cultures, as well as bananas from the Canary Islands.
Cattle are found mainly in northern and northwestern Spain (Galicia – Basque Country), while sheep farming is more widespread. Local specialties are breeding of horses and bullfighters.
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About 1/3 of the country’s total area is classified as forest land, but as in other Mediterranean countries, almost all the original forest has been destroyed long ago. With the exception of the country’s north and northwest, as well as some mountain regions, productive forests are lacking. Attempts to reforest are ongoing, and as a basis for the pulp industry, fast-growing eucalyptus and poplar species have also been planted. Forest harvesting, which amounts to approximately 16 million m 3 per year, half of which will be pulp, cannot meet the country’s needs. Forestry also includes the extraction of natural cork from cork forests in Andalusia and Extremadura.
Spain has the EU’s largest fishing fleet and the Spaniards consume the second most fish in the world after the Japanese. Spain is one of Europe’s leading fishing nations, but various restrictions on fishing rights, including outside Morocco and in European waters, have affected the industry, making fishing an important and sometimes controversial issue in EU cooperation. About 1 million tonnes are landed annually; Cod, sardines, tuna, octopus, mussels and oysters are the most important catches.
The most important catch areas are now along the coasts of Newfoundland, Greenland and West Africa. Fishing provides a basis for a significant fishing industry in Spain. Galicia is the most important region with Vigo and La Coruña as the largest fishing ports. Various ports along the Bay of Biscay as well as Cadiz and Huelva in Andalusia and Las Palmas in the Canary Islands are also significant.
For thousands of years, metal extraction has been important for developments in the area, not least during the Roman period, and the assets of minerals and coal have been of great importance to the development of the Spanish business community in recent history. Thus, the coal (in Asturias) and the iron ore (in the Basque country, among others) became the basis for extensive industrialization in northern Spain. around Bilbao and Oviedo. The abundant metal deposits in the Iberian Pyrite belt, a 250 km long volcanic formation between Seville and Lisbon, have dominated the supply, mainly with regard to iron, sulfur, gold, silver, copper, lead and tin. The recovery has mostly ceased, but exploration for planned exploitation continues.
Spain is one of the world’s leading producers of plaster, flux, sand, gravel and cement. The economically most important raw materials are copper, zinc, gold, steel, coal, cement and aluminum. Most deposits are relatively small. An exception is the mercury mines in Almadén, which were closed in 2000 due to falling world market prices. The deposit is one of the richest in the world and has been used since Roman times.
The mining sector contributes about 1 percent to GDP; commodity imports are greater than exports.
Nuclear power is Spain’s most important domestic energy source and represents almost half of this energy supply. Subsequently, biofuels, wind and solar energy, coal, and hydropower are followed. However, only one fifth of the total energy demand is produced in the country, and in total, nuclear energy contributes just over 10 percent to the total energy supply. Significantly more important are oil and natural gas, which contribute about 65 percent and 25 percent, respectively, to energy production. The most important oil deposits are outside Casablanca, Morocco, but the extraction from this field represents only a vanishingly small part of the total oil demand.
Spain is one of the world’s leading producers of wind and solar energy and their share of total energy supply is increasing rapidly. Renewable energy types contributed just over 16 percent of energy use in 2014. The goal is to reach 21 percent by 2020. Most of the wind energy effect is installed in the Castilla y León region in the north-eastern highlands. The solar power plants are mainly installed in Andalusia. The hydroelectric power is also well developed by the construction of a number of dams in the river valleys. The water is also used for irrigation.
Spain developed during the latter part of the 20th century into one of the world’s major industrial nations. However, the main features of the historical location pattern remain. Catalonia has been one of the core industries of the Spanish industry since the 18th century, mainly through its large textile industry. The iron and steel industry, later also other heavy industry, has been concentrated in northern Spain, mainly in the Basque Country and Asturias. During the Franco period, the capital area was mainly invested; Madrid and Barcelona became the country’s two main industrial regions. Following EU accession, the proportion of industrial investment along the Mediterranean coast increased. In 2017, the industry accounted for 23 percent of both the country’s GDP and employment.
In addition to the Basque Country (Bilbao area) and Asturias (Avilés-Gijón-Oviedo), a large iron and steel industry has been built up in Valencia (Sagunto). Although the country lacks its own bauxite, aluminum smelters have been built in several places, including Avilés, San Ciprián and Valladolid. The metallurgical industry is also located in Cartagena. Spain has several major oil refineries, e.g. in Tarragona, Bilbao, Santa Cruz de Tenerife, Cartagena, Algeciras and Puertollano. The chemical industry is found mainly in the Barcelona and Madrid areas as well as in Bilbao, Santander and Gijón. Cement is manufactured in, among others, Bilbao and Seville, and Spain is one of the world’s largest exporters.
Large parts of the heavy industry, especially the iron, steel and shipbuilding industries, have been forced to cut and restructure as a result of the economic downturn and increased international competition. The machinery and engineering industry has had a more favorable development. The automotive industry has become a leading industry branch with significant exports. Two of the country’s largest industrial companies are SEAT (major owner Volkswagen) and Spanish Renault, but many of the world’s other major car companies have established themselves in Spain. Composition factories can be found in Madrid, Barcelona, Valencia, Seville, Zaragoza, Valladolid and Cadiz. In total, about 2 million cars are produced per year.
The country’s main industrial regions are found around Barcelona, which has a diverse and growing industry but where competition from, for example, Asian countries has led to difficulties for the area’s traditional textile industry (as well as for the leather and shoe industry in Alicante and Mallorca), as well as around Madrid, as in large Seen without heavy industry but has an extensive consumer goods industry and other light industry. In addition to the Bay of Biscay, there are also more concentrated industrial regions in Galicia (Vigo – Pontevedra, La Coruña – El Ferrol) with ties to other large fish industries and in metropolitan areas such as Valencia, Alicante, Cartagena, Malaga, Seville, Cádiz and Zaragoza.
Since 2007, the country’s economic problems have also affected the industrial sector, which has experienced an increased number of bankruptcies. Foremost is the construction-related industry that has been affected. During the 10th century, Spain has tried to develop industrial industries with a focus on new technology and renewable energy.
The country’s trade balance was long negative. Earlier, the large tourist income and transfers from Spanish emigrant workers made the trade balance positive. However, after entry into the EU, imports increased much more than exports. The differences could then no longer be offset by tourist income, but Spain had a significant deficit in its foreign trade until the beginning of the 2010s. In 2013, however, the trade balance showed a small surplus.
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The most important export goods are machinery, cars and agricultural products. Imports include machinery and electrical equipment as well as crude oil, food and transport equipment. The majority of trade exchanges take place with other EU countries, mainly France, Germany, Italy, the UK and Portugal, as well as with the USA.
With just over 60 million tourists entering 2013, Spain is the world’s second largest tourist country after France. During almost the entire first half of the 20th century, the number of visitors was 250,000 per year and only one million visitors were reached in 1950. With the stabilization of the Spanish currency in 1959 and the development of charter tourism shortly thereafter, the number of visitors in 1965 amounted to 14 million, in 1973 to 28 million and in 2000 to 48 million. The most important tourist areas are Catalonia, the Balearic Islands, the Canary Islands and Andalusia. Most visitors come from the UK, Germany and France. Swedes accounted for 1.9 million of the visits.
A significant number of tourists come to enjoy Spain’s sun and bathing opportunities. The major destinations are the Canary Islands, Mallorca and the Spanish Mediterranean coast from Costa Brava in the north to Costa del Sol in the south.
Note: the capital city of Spain is Madrid with a population of 3,266,000 (2019). Other major cities include Barcelona with a population of 1,637,000, Valencia with a population of 794,000, Sevilla with a population of 689,000, Zaragoza with a population of 675,000, Málaga with a population of 575,000 (2019).
The nature and hiker is interested in traveling to the Pyrenees and the Cantabrian mountains in the north with the large national parks Ordesa and Picos de Europa, which among other things have an interesting wildlife. Many follow the old pilgrimage west across the Cantabrian mountains to Santiago de Compostela in Galicia. In southern Spain, the Sierra Nevada mountain range offers both spring and summer trips as well as skiing holidays in the winter.
At the outlet of the Guadalquivir River in Andalucia, it is located on the UNESCO World Heritage List, the Doñana National Park with rich bird life. Fascinating nature can also be found in the Canary Islands with Caldera de Taburiente on La Palma and Teide on Tenerife. Spain’s diverse past, with impetus from a variety of cultures, has set aside numerous historical monuments, many of which are listed on the World Heritage list. This is especially true of the central parts of several old cities, with cathedrals and other important historical buildings. In addition to the aforementioned Santiago de Compostela in Galicia, Toledo, Salamanca, Segovia, Ávila, Burgos and a number of other cities on the high plateau are noted. In Andalusia, where the Muslim influence has been strongest, Granada with the Alhambra Palace and the Generalife, Garda, Córdoba with La Mezquita Cathedral, Seville.
With its diverse selection of museums and events, however, Madrid, with the Prado Museum and the Centro de Arte Reina Sofía, and Barcelona, with among others the Picasso Museum and the Maritime Museum, attracts the most visitors among the cities. Even smaller resorts with special sights attract many tourists, such as the Guadalupe monastery in Extremadura and the region’s historically interesting little capital Mérida, the Basque holy city of Guernica, or the ravine town of Ronda in Andalucia with the bullfighting arena declared as a national monument.