Spain - London Chamber of Commerce and Industry

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ECONOMIC OVERVIEW 6Since the transition to democracy in the late 1970’s and early 1980’s the Spanish economy has beenradically liberalised and today Spain is the eighth largest economy in the world. The Spanisheconomy is predominantly a service-based economy with 71.88% of the working population employedin the tertiary sector, while 14.41% are employed in industry, 9.81% in construction and 3.90% inagriculture. In the last four years, the number of people working in the services sector has grown by5%.Following a decade of sustained economic growth which continued up until 2006, Spain enteredeconomic recession in 2007 and the economy shrank by 4% in 2008. International trade is central tothe Spanish economy and it ranks 17 th in the world as an exporter of goods and 7 th as an exporter ofservices, it ranks 12 th as an importer of goods and 9 th as an importer of services. The country’s mainexports are capital goods, automobile-related products, food and chemical products. The main goodsand services imported by Spain are; capital goods, energy products, chemical products andautomobile-related products. Until 2006, foreign direct investment in Spain radically increased to over€200 billion. However in the wake of the economic downturn this has been greatly reduced to thedetriment of the Spanish economy.Spain and the global economic downturn: PlanE 7As with many other countries, Spain was highly vulnerable to the global economic downturn thatbegan in 2007. Nonethless, the Spanish government launched the Plan Español para el Estimulo dela Economía y el Empleo (PlanE). As Spain has the second most open economy in Europe much ofthe foreign investment was withdrawn and it resulted in high external debt. PlanE, launched in 2008was the government’s response to try and reduce the potential disastrous consequences for thecrisis. A series of over 80 measures have been taken across the national economy to stimulateeconomic activity and continue investment. The plan is based upon four areas of action; financial andbudget measures, increase employment, economic modernisation and supporting businesses andfamilies all with the aim of developing a sustainable economy. As part of the economic modernisationaspect of PlanE, a National Reform Programme was launched which seeks to increase investment inkey sectors such as the aerospace, automotive, environmental, ICT and renewable energy industries.ECONOMIC INDICATORSPopulation (2009) 845.82 millionUnemployment rate (2008) 9 11.3%GDP per capita(Euro) (2008) 10 €24,020GDP average growth rate (2008 11 & 2009 12 ) 0.9% and -3.7%Inflation rate (2008) 13 4.1%Total exports (Euro) (2008) 14185.02 millionTotal imports (Euro) (2008) 15285.04 millionInternet usage rate (% of households) (2009) 16 54%INFRASTRUCTURE/ENVIRONMENTRoads 17Spain has a highly developed network of roads and motorways. According to the latest EU statistics, ithas 12,073km of motorways, 13,731km of main roads, 140,535km of secondary roads and501,053km of smaller roads 18 . Between 1990 and 2007 there was a 0.7% increase in cars using theSpanish road network 19 .Railways 20In recent years Spain has enhanced the capacity of its rail network and in 2007 it had 15,012km ofrailways (58.2% of which were electrified) 21 . It is run by the state-run Red Nacional de FerrocarrilesEspañoles (RENFE). Spain has been at the forefront of developing high speed rail travel. The AltaVelocidad Española (AVE) connects the cities of Madrid, Sevilla, Zaragoza, Barcelona and Malaga. In2008, Madrid and Barcelona were connected for the first time by the AVE and it is now possible totravel between them in less than 3 hours at speeds exceeding 250km per hour. The Spanish© Enterprise Europe Network London, London Chamber of Commerce and Industry, January 2010 2
government has set a target of laying 10,000km of train lines for high-speed trains by 2020 and thiswould make it the most developed in Europe. Seven high-speed train lines are currently underconstruction and will be opened in 2012 connecting cities such as Murcia, Vigo, La Coruna, Granada,Bilbao and Santander, which until now have not been connected to the high-speed lines 22Shipping 23Given Spain’s strategic geographical location and being a country with a coastline of 8,000km,shipping plays a crucial role in the transport infrastructure of the country. There are 53 ports locatedon both the Atlantic and Mediterranean coasts and Spain is ranked fourth in sea freight transportation(behind the United Kingdom, Italy and the Netherlands) 24 According to official statistics for 2007, 59%of Spain’s exports and 82% of its imports passed through Spanish ports. Shipping contributes to 20%of the transport sector’s GDP and 1.1% of the national GDP. The importance of shipping is alsoreflected in the role it plays in its foreign trade (53% of trade with other EU countries is throughshipping and 96% of trade with third countries). The ports of Algeciras, Barcelona and Valencia arethe main shipping terminals in Spain. Between 2000 and 2005, Spain saw the largest annual growthof short-sea shipping in the EU (an 8.3% increase compared with the EU average of 3.5%) 25 .Civil aviation 26In 2008, 203.8 million passengers travelled through Spanish airports. This was an increase of 45%from the passenger numbers in 2000. There are 49 airports in Spain and 250 airline companies useSpanish airports 27 . In 2008, the busiest airport was Madrid-Barajas which processed 50.85 millionpassengers, followed by Barcelona which accommodated 30.21 million. They are the fourth andeighth busiest airports in the EU respectively 28 . The main Spanish airline is Iberia which took 24million passengers of the total market share.Energy 29The three main sources of energy used in Spain are oil, natural gas and nuclear energy. In 2008, 48%of the country’s energy came from oil and this constitutes the number one energy source. Howeverthe use of petrol as a primary source of energy has fallen and between 2007 and 2008 it fell by 3.9%.While in 2008 Spain consumed 68.1 million tonnes it only produced 127 000 tonnes and the majorityof oil is imported.Natural gas is the second main source of energy. In 2008, 450 726KWh was used, which was a 10%increase of the previous year. The increased use of natural gas as a primary source has beenattributed to Spain’s growing environmental awareness as well as the competitiveness of Spanish gassuppliers such as Gas Natural and Endesa which have benefited from liberalised markets.Nuclear energy has become an increasingly used source of energy. Spain has six nuclear powerstations and is the source of 18.9% of the nation’s energy.Telecommunications 30In recent years liberalisation of the telecommunications market in Spain has opened up the market toother companies and has reduced the monopoly that the former state-run company Telefonicapreviously held. Telecommunications had an annual turnover in 2007 of €50.288 million (compared to€44.603 million in 2005) 31 . The mobile phone industry saw an increase of 5.9% in the number ofmobile phone subscriptions between 2003 and 2008, while the number of landlines in the countryincreased in the same period by 2.6% (which was the third highest increase in EU and 18 EUcountries saw a decrease in the number of landlines) 32 .Other companies have entered into the growing mobile phone market such as Orange and Vodafone.In recent years there has also been a rapid expansion in the broadband internet network in Spainthrough the Avanza Infrastructures Programme. Due to the fact that 50% of the country is covered bymountains, broadband access is not as widespread in rural areas as it is in urban areas. Thegovernment is increasing access to high-speed broadband and investing over €55 million in thetechnology required 33 .Environment 34In 2006, Spain had the highest greenhouse gas emissions in the whole of the EU and its target forcutting emissions is the third most generous for all member states 35 . In the last decade Spain hasbenefited from €12,357 million to improve the environmental and transport infrastructure of thecountry 36 . Water management has been one of the most pressing demands on the Spanish© Enterprise Europe Network London, London Chamber of Commerce and Industry, January 2010 3
Page 1 and 2: SpainEnterprise Europe Network Lond
Page 3: SPAINCountry’s full name: Kingdom
Page 7 and 8: Seat, Ford, General Motors, Volkswa
Page 9 and 10: government will increase its resear
Page 11 and 12: Spanish Constitution Day6 DecemberI
Page 13 and 14: This country profile was produced b
Page 15: 80 Ibid81 Ibid: www.investinspain.o

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