1. ECONOMY OF SPAIN Hochschule Bochum International Business & Trade Dr. rer. nat. Mario Lucas 23 of June of 2016 Antony Ayllón Ricavarria

2. Economy of Spain 2 Table of contents 1.General information about Spain 2.Current economic situation 3.Foreign trades 4.Foreign direct investments (FDI) 5.SWOT analysis 6.Conclusion

3. Economy of Spain 3 1. General information Capital: Madrid Currency: Euro (EUR) Language: Spanish Population: 46.404.602 million Area: 505.940 km 2 President: Mariano Rajoy

4. Economy of Spain 4 1. General information Figure 1: Demographic development divided in group of ages. Source: Data from Wirtschaftskammer Österreich (2016), p. 3.  65 and older  15 to 64  Under 15

5. Economy of Spain 5 1. General information  Agriculture  Production  Services Figure 2: GDP divided by sectors Source: Data from Wirtschaftskammer Österreich (2016), p. 4. Figure 3: Employed workers by sector Source: Data from Wirtschaftskammer Österreich (2016), p. 4.

6. Economy of Spain 6 2. Current economic situation GDP: $1.381 trillion Growth rate: 2,6 % Unemployment: 24.7 % Inflation: -0.2 % Public debt: 97,7 % of GDP Figure 4: GDP per capita, USD. Source: Wirtschaftskammer Österreich (2016), p. 1.

7. Economy of Spain 7 2. Current economic situation Figure 5: Variation of GDP, in % per year Source Wirtschaftskammer Österreich (2016), p. 1. Figure 6: Inflation rate Source: Wirtschaftskammer Österreich (2016), p. 2.

8. Economy of Spain 8 3. Foreign trades Figure 7: Foreign trades, billion Euro. Source: Data From Germany Trade and Invest (2016), p. 3. Imports Exports Saldo

9. Economy of Spain 9 3. Foreign trades Top 5 Export goods 2014 Street vehicles 16,20% Vegetables and fruits 6% Oil, oil products 5,90% Medical Products 4,20% Clothing and clothing accessories 3,90% Top 5 import goods 2014 Oil, oil products 16,40% Street vehicles 11,10% Clothing and clothing accessories 4,90% Medical Products 4,50% Electric machines and devices 4,10% Table 1: Export goods Source: Wirtschaftskammer Österreich (2016), p. 6. Table 2: Import goods Source: Wirtschaftskammer Österreich (2016), p. 6.

10. Economy of Spain 10 3. Foreign trades Figure 8: Foreign trades by countries Source: Data From Germany Trade and Invest (2016), p. 3f..

11. Economy of Spain 11 4. Foreign Direct Investment (FDI) Foreign Direct Investments (FDI)201220132014 FDI flow (million USD)25,69641,73322,904 Number of GreenField Investments402385371 Main Investing Countries 2014 (%) Luxembourg36.6 The Netherlands15.3 France8.3 UK7.3 Mexico6.2 USA4.8 Portugal3.4 Germany2.3 Main Invested Sectors 2014 (%) Commerce18.2 Real estate17.5 Financial intermediation14.8 Manufacturing11.6 Construction7.9 Electricity, gas, air-conditioning5.7 Information and communication4.6 Table 3: FDI in figures Source: Santander trade (n.d.). Table 4: FDI by countries Source: Santander trade (n.d.). Table 5: FDI by sectors Source: Santander trade (n.d.).

12. Economy of Spain 12 4. Foreign Direct Investment (FDI) Form of company preferred by Foreign investors: o Public Limited (Sociedad Anónima) o Limited Liability Corporation (Sociedad Limitada) Forms of establishment preferred by Foreign Investors: o Subsidiary company Investment opportunity sectors: Chemical industry, automobile, naval construction, paper manufacturing, telecommunications, banking, infrastructure and energy Investment sector with fewer opportunities: Textile and agriculture

13. Economy of Spain 13 5. SWOT analysis Strengths 5 th greatest market of the EU with 46 million consumers Good infrastructure Internationalization about trade, direct investments, concessions Weaknesses Very high unemployment rate, especially of young people High, further growing state indebtedness Exceptionally big portion of Small companies (96 %) Deficits in professional training Low investments in R&D (compared to EU) Opportunities Increase in consumption Investment and modernization need, particularly concerning energy efficiency Potential as a gas and electricity supplier of the EU Connections with Portugal, Latin America and North Africa Threats Dependence of investors’ confidence, due to debts Political uncertainties by the independence efforts of Catalonia Unsolved structural finance problems of the regions SWOT

14. Economy of Spain 14 6. Conclusion The country's main strong points are flexibility and adaptability of economic operators as well as the quality of life Spain offers. Spain applies the principle of free establishment and non-discrimination. Foreign investors can operate any type of business and under the same conditions as a local investor. Big domestic market and good infrastructure as an opportunity. Favorable for internationalization. The country's weak points are the low productivity of its manpower, its weak competitiveness as well as a growing trade balance deficit. Coface Spain: Coface Germany:

15. Economy of Spain 15 Sources: Coface (2016): Spain, online in internet: http://www.coface.com/Economic-Studies-and-Country- Risks/Spain, accessed on 21.06.16.http://www.coface.com/Economic-Studies-and-Country- Risks/Spain Germany Trade and Invest (2016): WIRTSCHAFTSDATEN KOMPAKT, Spanien, online in internet: http://www.gtai.de/GTAI/Content/DE/Trade/Fachdaten/PUB/2016/05/pub201605302024_159210_wirts chaftsdaten-kompakt---spanien--juni-2016.pdf?v=1, accessed on 21.06.16. http://www.gtai.de/GTAI/Content/DE/Trade/Fachdaten/PUB/2016/05/pub201605302024_159210_wirts chaftsdaten-kompakt---spanien--juni-2016.pdf?v=1 Germany Trade and Invest (2015): Wirtschaftstrends kompakt Jahreswechsel 2015/16, Spanien, online in internet: http://www.gtai.de/GTAI/Content/DE/Trade/Fachdaten/PUB/2016/01/pub201601198003_20654_wirtsc haftstrends-kompakt---spanien--jahreswechsel-2015-16.pdf?v=1, accessed on 22.06.16. http://www.gtai.de/GTAI/Content/DE/Trade/Fachdaten/PUB/2016/01/pub201601198003_20654_wirtsc haftstrends-kompakt---spanien--jahreswechsel-2015-16.pdf?v=1 Index of Economic Freedom (2016): Spain, online in internet: http://www.heritage.org/index/pdf/2016/countries/spain.pdf, accessed on 20.06.16. http://www.heritage.org/index/pdf/2016/countries/spain.pdf Santander trade (n.d.): Spain: Foreign investment, online in internet: https://en.portal.santandertrade.com/establish-overseas/spain/foreign- investment?actualiser_id_banque=oui&id_banque=54&memoriser_choix=memoriser&&actualiser_id _banque=oui&id_banque=54&memoriser_choix=#opportunities, accessed on 21.06.16. https://en.portal.santandertrade.com/establish-overseas/spain/foreign- investment?actualiser_id_banque=oui&id_banque=54&memoriser_choix=memoriser&&actualiser_id _banque=oui&id_banque=54&memoriser_choix=#opportunities Wirtschaftskammer Österreich (2016): Länderprofil SPANIEN, online in internet: http://wko.at/statistik/laenderprofile/lp-spanien.pdf, accessed on 20.06.16. http://wko.at/statistik/laenderprofile/lp-spanien.pdf

16. Economy of Spain 16 Thanks for your attention. Any questions?