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 economy will remain among the fastest growing in the eurozone in 2016, in spite of the country's ongoing political impasse.

  • Tailwinds from cheap oil and ECB asset purchases (QE) will support short-term growth, but will act as a disincentive for politicians to implement the structural reforms needed to boost long-term growth.

  • Spain's current account surplus has peaked and will shrink over the coming years, returning to deficit in around 2020.

  • Already unrealistic budget deficit targets will move further out of reach once a new government is (eventually) formed in Spain.

  • Spain is set for a period of high political instability, as the December 20 election produced no clear winner and left Spain with an extremely divided political...

Spain Industry Coverage (19)


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 boost sales in H116 but not to the same extent as previous years as less consumers will be able to meet the scrappage requirements.

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

Key Views

  • Long-term potential for strong car sales growth exists owing to ageing vehicle fleet but will not be realised over next five years owing to the country&#...

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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The Spanish armed forces have experienced significant challenges in recent years on account of the situation regarding the Spanish defence budget. Spain's financial crisis prompted the government to perform significant cutbacks as far as defence spending was concerned in a bid to rain in government spending. As a result, several major Spanish defence modernisation programmes were either reduced or postponed. This was in addition to a wider downsizing of the country's armed forces. Following this prolonged period of defence budget reductions, the country is now expected to slowly reverse this trend, increasing its defence expenditure over our forecast period to 2019 and beyond.

Towards the end of the decade, the Spanish government will increase defence spending to the highest levels witnessed since 2011. This represents an important growth as far as defence spending is concerned. Nevertheless, while defence spending increases...

Food & Drink

Spain Food & Drink

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BMI View: After several years of contraction, the Spanish food and drink market is set to register a strong recovery in 2015, as total food consumption is forecast to expand by 6.3% y-o-y. Growth will moderate in the post-2015 period, resulting in a 4.4% five-year average growth rate. The recovery will be driven by the gradually rising household spending, supported by improvement in consumer confidence and strengthening labour market.

Headline Industry Data

  • Food consumption (local currency) growth y-o-y in 2015: +6.3%; compound annual growth rate (CAGR) 2014-2019: +4....

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 : Construction industry growth in Spain will remain on a positive trajectory in 2016 as a result of investment in transport infrastructure, particularly in the railways segment. Political uncertainty on the back on the upcoming general elections and the months that follow poses the main downside risk to our forecasts.

Latest Updates And Structural Trends

  • Growth in the Spanish construction sector will be driven largely by EU-backed developments in the rail sector, as well as economic recovery and investment-friendly regulatory changes in the renewable energy sector. However, the pace of growth will be moderate, particularly in residential building and...


Spain Insurance

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BMI View: Both life and non-life insurance are well-established in Spain and the market is large in absolute terms, though rates of penetration and density are relatively low. This indicates potential for substantial longer term growth, though in the short term the market faces considerable challenges. While Spain's economic recovery is gaining traction, high levels of unemployment, combined with high levels of household debt is placing consumer demand under pressure and spending on non-essential items has been heavily curtailed. As such, growth will remain low, particularly in the life sector, for much of the forecast period. Some subsectors in the life sector, such as personal accident insurance, do present stronger growth opportunities, but these forecasts are heavily dependent upon Spain remaining in positive economic...

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...


Spain Metals

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BMI View: After the economic hardship of the past few years, the outlook for Spain's metals sector is increasingly positive as the country's manufacturing and construction industries begin a tentative recovery. However, high operating costs and a lack of export competitiveness remain a concern for steel and other metals producers. Overall, we do not expect Spanish metals production to return to pre-downturn levels in the immediate future.

Spain boats one of Europe's leading metals industries and is currently the fourth largest steel producer in Europe, behind Germany, France and Italy. The company is an important base for high-quality steel production, with leading multinational steelmaker ArcelorMittal...

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. As such, we expect imports will meet approximately 99% of demand for the foreseeable future. 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.



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: We maintain our subdued outlook for the Spanish pharmaceutical market. Price caps on originator medicines have negatively impacted the country's generic drug sector, which lags behind other European markets. However, new measures to improve access to generic and biosimilar medicines will lead to greater opportunities for generic drugmakers operating in the country.

Headline Expenditure Projections

  • Pharmaceuticals: EUR24.71bn (USD33.11bn) in 2014 to EUR25.18bn (USD27.70bn) in 2015; +1.9% in local currency terms and -16.3% in US dollar terms. Forecast unchanged from last quarter.

  • Healthcare: EUR90.72bn (USD121.56bn) in 2014 to...


Spain Power

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BMI View : Spain has a mature power market which benefits from an extensive transmission and distribution network, including multiple interconnections with neighbouring states, and a diversified energy mix. The regulatory environment has been clarified in recent years, creating a more secure operating environment though we note ongoing government austerity measures have reduced the attractiveness of investment in new capacity. Non-hydropower renewables, which already account for around a quarter of generation, continue to present a potential growth area and the market is home to a number of global power firms which bring significant capital and expertise to the sector. As coal and oil generation continue to be phased out we do expect to see further growth in renewables, though overall limited consumption growth and lack of incentives mean future investment in new capacity will...


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 : For the first time in five years of recession, Spain's economy recorded positive growth in 2014, rising by 1.4%. We are expecting growth in 2015 to reach 2.7%. This return to positive growth is helping to ease the high levels of unemployment which in turn is stabilising the retail market. Households are gradually becoming more confident owing to rising disposable incomes, and this will help to boost real sales in the country.

Spain has continued to recover from its financial crisis and has made notable improvements over 2015. Real GDP is expected to reach 2.7%, which is above the EU average. 2015 is also expected to be the first year since the financial crisis began in 2008 when real GDP has expanded for two consecutive years. We believe that this reflects the...


Spain Telecommunications

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BMI View: Operators have made significant investments in fibre, as it becomes the main access technology over cable. In Q115, Fibre-to-the-home (FTTH) and DOCSIS technology passed over 10mn and 16mn homes, respectively. We believe regulator CNMC needs to strike a balance between encouraging investment in new technologies and ensuring competitive markets as well as universal coverage.

Main Trends & Developments

  • Incumbent Telef onica doubled the number of homes passed with fibre from 5.1mn in 2013 to 10.2mn in 2014. Regulator CNMC ruled it must share its network in all but 24 markets.

  • We forecast muted growth for mobile subscriptions, which are now expected to reach 50.5mn by 2019, but 3G/4G penetration of the market will be much more vibrant, with 40.5mn...


Spain Tourism

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BMI View: We expect inbound tourists to Spain to increase by 2.7% in 2016, which, although a modest slowdown from the estimated 4.4% posted in 2015, is still respectable growth for a market of this size and maturity. Over the coming quarters, growth in non-eurozone arrivals will continue to be supported by a weak euro, while improving economic conditions within the currency bloc will spur increased intra-European tourism. The flipside of its large size is that Italy's tourism sector is saturated and offers only minimal room for medium-to-long term growth. Opportunities are thus more likely to be capitalised on by existing players rather than new entrants.

We estimate that total arrivals in 2015 reached 67.8mn, only a fraction under the Spanish Tourism Ministry's target of 68mn. We expect this number to rise to 69.7mn in 2016. Although we expect to see...


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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