In-depth country-focused analysis on Spain's economic, political and operational risk environment, complemented by detailed sector insight


As the fourth largest eurozone economy, Spain offers a wealth of opportunity for investors and is an important market for many of our clients. The past three decades have seen a significant transformation in the country, with a move from dictatorship into democracy, the embracing of the EU, and the adoption of the euro. Spain emerged from deep recession after the eurozone financial crisis, to be one of the eurozone's fastest growing economies in 2014 and 2015, but key risks continue to cloud Spain’s longer term outlook.

We keep our clients informed of the latest market moves and political developments as part of our 'top-down' and 'bottom-up' perspective. They also benefit from in-depth analysis on 18 of Spain’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our results-proven research teams. We aim to keep you ahead of the curve so you can operate with confidence in Spain.

Country Risk

Spain Country Risk

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Core Views

  • Spain's economic outlook will deteriorate over the next two years as strong growth rates in previous quarters prove unsustainable.

  • While we believe that Spain's economy will remain a eurozone growth outperformer over the next two years, we maintain our view that the country's economic recovery has reached its peak.

  • Private consumption, the main growth driver, will moderate in 2016 and 2017, while anaemic eurozone growth will weigh on external demand.

  • We believe fixed investment will take a hit, and our projections show a clear downtrend in gross fixed capital formation's pp contribution to GDP growth over the coming years. In particular, this will intensify existing weaknesses in the country's construction sector.

  • We see...

Spain Industry Coverage (18)


Spain Agribusiness

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BMI View: Livestock prices have held up relatively well in the EU despite the impact of Russia's embargo. We therefore expect to see continued growth for pork, Spain's most important livestock commodity. Meanwhile, we expect a lower wheat harvest, as droughts will offset good plantings. The dairy sub-sector is adapting to the end of the EU production quota, which will increase competitive pressure on Spanish producers and lead to a subdued outlook for the sector's growth.

Agribusiness Market Value
BMI Market Value By Commodity (2011-2019)


Spain Autos

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BMI View: The extension of purchasing subsidies for passenger cars will provide only marginal support to sales in H116, but not to the same extent as previous years as less consumers are willing and able to meet the scrappage requirements.

Passenger Car and Light Commercial Vehicle Sales
f = BMI forecast. Source: National Sources, BMI

Commercial Banking

Spain Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Defence & Security

Spain Defence & Security

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BMI View: We expect the Spanish defence budget to grow in line with gradually improving economic conditions in coming years. However, we note that funding available for new procurement remains restricted, as the defence ministry's debt on existing military programmes is substantial. This will also limit state investment into sector R&D - a challenge for Spanish defence manufacturers, as they face stiff competition from world-class Western European suppliers. That said, Spain's defence industry ...

Food & Drink

Spain Food & Drink

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BMI View: Gradually improving economic situation, strengthening labour market and low inflation levels will support steady, albeit unimpressive, growth levels in the Spanish food and drink industry. While increasing health consciousness and greater demand for convenience will shape consumption trends, low levels of disposable income will sustain strong demand in the discount segment.

Food And Drink Spending
f = BMI forecast. Source: BMI, national statistics

Freight Transport

Spain Freight Transport

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BMI View: Spain's freight transport sector will experience modest growth in the coming years as it continues to recover from the devastating impact of the recent recession. Following years of contraction across freight modes, there were signs of recovery in 2014 and into 2015, and we expect volumes to continue on this upward trend in 2016. We caution, however, that the freight sector remains overly reliant on export demand, particularly from Spain's main eurozone partners, many of which are undergoing weak growth.

Economic growth in Spain will continue to outpace many regional peers in 2016, with real GDP set to increase by 2.4% from 2.7% in 2015. Improving consumer spending has underpinned Spain's improved economic growth prospects. While this partially reflects a drop in...


Spain Infrastructure

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BMI View : In 2015, Spain's construction industry recovered after six years of consecutive decline. While we maintain our positive outlook for the industry in 2016, persisting political uncertainty in Spain poses a significant downside risk to our forecasts. In the medium- to long term, growth in the construction industry will be held back by the country's structural economic weaknesses, constraints on government spending as well as negative public view on large-scale infrastructure projects, stemming from the pre-financial crisis years.

Latest Updates And Structural Trends

  • In 2015, Spain's construction industry recorded growth for the first time since 2008. The total industry value rose by 5.2% y-o-y, reaching EUR54.3bn. We expect the construction industry to sustain...


Spain Insurance

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BMI View: Spain's insurance market is relatively well developed, though rates of penetration and density continue to lag behind those of other regional markets such as France, Germany and the UK. While this indicates there is still potential for the Spanish insurance market to grow, the market does face significant headwinds. Structural unemployment remains high in Spain, hampering affordability, and an uncertain political outlook is also dampening growth prospects. As such we expect to see only low single digit growth in both the life and non-life sectors over our forecast period to 2020, with further downside risk to our forecasts stemming from a potential...

Medical Devices

Spain Medical Devices

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BMI View: We forecast low market growth over the 2014-2019 period, as pre-crisis import growth levels are unlikely to return. Due to its large size, the market will remain attractive to multinational and national companies. Exports will counterbalance contained internal sales and still sizeable SNS debts. Most of the market will remain accountable to the public sector, affected by cost-containment measures implemented by the...

Oil & Gas

Spain Oil & Gas

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BMI View: Though we witnessed an uptick in upstream investment into conventional resources within Spain over the past several years, we expect domestic production of oil and gas will remain negligible. Moreover, we believe prospects for onshore unconventionals will remain limited as significant technical, economic, environmental and political obstacles preclude us from including further upstream development of shale gas resources within our forecast period.

Headline Forecasts (Spain 2014-2020)
2014 ...


Spain Petrochemicals

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BMI View: Downsizing of capacity did not dent Spain's continuing robust recovery in petrochemicals in 2015. In the first nine months of 2015, the Spanish petrochemicals industry saw respectable growth with chemicals output up 3.7% y-o-y and rubber and plastics rising 5.7%. While there are risks going forward and external vulnerabilities, the industry is set for another year of growth in 2016.

The country's domestic markets are seeing uneven growth with construction falling behind the automotive industry. The former represents the large bulk of PVC and polypropylene (PP) pipe consumption while the latter requires a diverse range of products including PP, polyurethanes (PUs) and synthetic rubbers. With construction stagnating, it will be the solid growth in the automotive industry that stimulates petrochemicals demand with a resultant pull on certain market...

Pharmaceuticals & Healthcare

Spain Pharmaceuticals & Healthcare

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BMI View: Growth in the Spanish pharmaceutical market will remain slow but steady, despite being an economic outperformer in Western Europe. The ageing population of Spain, and the wider Europe region, will create significant revenue earning opportunities for drugmakers. However, as populations age, the effective economic old-age dependency ratio is also projected to rise sharply. This will place pressures on government budgets and the funds available for welfare spending, including expenditure on pharmaceuticals and healthcare.

Headline Expenditure Projections

  • Pharmaceuticals: EUR25.18bn (USD27.93bn) in 2015 to EUR25.62bn (USD27.42bn) in 2016; +1.7% in local currency terms and -1.8% in US dollar terms...


Spain Power

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BMI View : Spain's power sector will be marked by a focus on renewable and gas-fired generation. Renewable capacity will be hampered by lack of subsidies and uncertain policy environment (as Spain is yet to form a workable governing coalition) while gas-fired power will come from mothballed capacity brought online to compensate for reduced hydropower output.

Headline Power Forecasts (Spain 2015-2021)
2015e 2016f


Spain Renewables

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BMI View: We maintain our muted outlook for the Spanish renewables sector this quarter, with investor confidence set to remain weak due to regulatory uncertainty from retroactive subsidy cuts and increasingly stringent sector regulation. The government attempt to unlock growth through more sustainable auctioning system will only have a limited impact, as only 700 megawatts of capacity is to be on offer in the first auction, and an auction timeframe has yet to surface. We therefore expect the country's renewables giants, such as Iberdrola and Gamesa, to look elsewhere for growth opportunities....


Spain Retail

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BMI View: We forecast only small growth in total household spending in 2016, as consumer confidence is still weighed down by slow economic recovery and high unemployment. However, over the rest of our forecast period to 2020 growth will pick up strongly, with total household spending reaching USD1,015.9bn in 2020, up from USD744.3bn in 2016. Housing and utilities, food and transport will continue to account for the lion's share of spending, as non-essentials spending is held back by economic uncertainty.

Headline Household Spending


Spain Telecommunications

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BMI View: The latest data from Spain's telecoms regulator, the CNMC, for the end of 2015 show that fibre continues to grow as the main access technology for broadband internet services. In December 2015, the EC approved the regulator's proposal to open up Telefonica's fibre network in Spain. Although BMI welcomes this development, we maintain our view that the regulator needs to strike a balance between encouraging investment in new technologies and ensuring competitive markets as well as universal coverage. Zegona and MasMovil are competing to become Spain's fourth major operator, which must be a...


Spain Tourism

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BMI View: Spain has long been one of the most popular holiday destinations in Europe, attracting a large number of visitors from throughout the region and from markets further afield. Supporting infrastructure is very well developed, including an extensive hotel market which caters to travellers of all budget levels and a transport network which provides a high level of domestic and international connectivity. As a mature market, we expect to see relatively slow growth in international arrivals to Spain over the coming years. We also note the potential impact of the UK's vote to exit the European Union (EU) which could both dampen arrivals from the UK and affect travel throughout the EU in light of the resultant economic uncertainty.

Key Forecasts (Spain 2013-2020)


Spain Water

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BMI View: This quarter we have upgraded and expanded our water forecasts for Spain to include desalination and reservoir extraction and losses . Overall, we expect that extraction and consumption levels will see an incremental decline, as more conservative usage habits in both domestic and agricultural consumers start to come into effect.

Spain's economic recovery will remain unbalanced in 2015. Real GDP growth is likely to remain overly dependent on net exports, while household spending remains tepid. This is reflected by a lack of inflationary pressures in the country, which continues to act as a deterrent for potential investors and constricts the maintenance and modernisation of the water and wastewater...

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