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 has exited crisis mode, with the country set to become a eurozone outperformer in 2015 and 2016.

  • Uncertainty surrounding the 2015 parliamentary election and the possible composition of the next government poses one of the biggest risks to Spain's economic recovery.

  • The era of export-driven economic growth is over in Spain. Recovering domestic demand, coupled with stuttering export growth, will ensure that the country's current account surplus shrinks over the coming quarters.

  • Low oil prices and subdued consumer spending will continue applying disinflationary pressures in Spain in 2015.

  • The era of austerity is over in Spain, with fiscal consolidation to progress at a slower pace as the 2015 parliamentary election nears....

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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, while Spanish pig carcass prices remain elevated compared to other EU producers and pork exports further afield are going from strength to strength. We therefore expect to see continued growth for Spain's most important livestock commodity. Meanwhile, we expect a good wheat harvest, as planting has gone well. The dairy sub-sector is adapting to a new legislative framework under the EU's milk package, which could lead to greater stability, although the potentially most transformative policy - collective bargaining - has not...

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Spain Autos

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BMI forecasts a 16.5% increase in vehicle sales in 2015 coming from a forecasted 15.0% increase in the passenger car segment and a 26.3% increase in the commercial vehicle (CV) segments. Past 2015, we forecast growth to remain steady, averaging 4.7% from 2016 to the end of our five-year forecast period in 2019, which will prevent Spain's vehicle markets from reaching volumes similar to pre-crisis levels.

However, Spain's long-term sales outlook remains bleak owing to our weak private consumption outlook. Spain's ageing vehicle fleet means that the country has the potential to boost new car sales growth over the next five years through a replacement cycle but we do not believe this will actually materialise. Spain's auto sector recovery is based on shaky foundations and still remains reliant on PIVE subsidies. Spain's consumers are still too weak and overleveraged to ramp-up...

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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

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Defence & Security

Spain Defence & Security

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BMI View:  In our view, Spain faces low security risks in terms of international conflict, interstate conflict and criminal activity. The country's high scores in our security risk ratings are bolstered by Spain's friendly relations with international states and European neighbours as well as its decreasing involvement in Afghanistan.

BMI's Spain Defence & Security report examines Spain's defence procurement priorities in detail. It also provides information regarding Spanish defence spending levels, the posture and doctrine of the country's armed forces and Spanish defence and security priorities.

We expect Spain to spend USD14.9bn on defence in 2014. On average, the country has spent USD12.9bn annually on defence between 2011 and 2013. The level of defence spending has fluctuated during this period as a direct result of...

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Food & Drink

Spain Food & Drink

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BMI View: After facing contraction in 2013 and 2014, the Spanish food and drink market is finally bound for a strong recovery in 2015, as total food consumption is set to expand by 6.3% year-on-year. Growth will moderate in the post-2015 period, resulting in a 3.8% five-year compound annual growth rate. The recovery will be driven by an improved household spending outlook, supported by the gradual improvement in consumer confidence, recovering real wages and lower income taxes.

Headline Industry Data

  • Food consumption (local currency) growth year-on-year (y-o-y) in 2015: +6.3%; compound annual growth rate (CAGR) 2014-2019: +3.8%;

  • Per capita food consumption (local currency) growth (y-o-y) in 2015: +6.0%; CAGR 2014-2019: +3.5;

  • Soft drinks value (local currency) sales...

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Freight Transport

Spain Freight Transport

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BMI View: The worst is over for the Spanish economy, and consequently its freight sector. Following years of contraction across freight modes, there were signs of recovery in 2014, and we expect volumes to continue on this upward trend in 2015. We caution however that the freight sector remains overly reliant on export demand, particularly from Spain's main eurozone partners, many of which are not in rude health themselves.

Headline Industry Data

  • Air freight volume is set to grow by 1.6% to reach 597,800 tonnes in 2015. Medium-term growth (to 2019) will average 2.1% per annum.

  • Tonnage handled at the port of Algeciras will grow by 6.60% to reach 103.17mn tonnes, with medium-term growth averaging 5.8% per annum.

  • Boxes handled at the port of Valencia...

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Spain Infrastructure

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BMI View : After seven years of recession, the construction and infrastructure industry will return to growth in 2015. Driven largely by EU-backed developments in the rail sector, growth will also be supported by the economic recovery and investment-positive regulatory changes in the renewable energy sector. However, the recovery will be muted and fragile, particularly in residential building and public works, with the economic growth and investor sentiment at risk from an uncertain political picture surrounding the December general election.

Spain's construction industry has suffered a severe and extended recession - losing an estimated EUR62.5bn in industry value between 2008 and...

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Spain Insurance

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BMI View: We expect Spain's insurance market to see steady growth in overall gross premiums over the duration of our forecast period through to end-2019. Spain boasts one of the biggest and most developed insurance markets in Europe, which is home to a number of large multi-national insurers as well as well-capitalised local providers. However, market growth has been hampered by the prolonged effects of the country's economic crisis which has severely dented the spending and investment potential of households and businesses alike. The main drivers will be a recovery in consumer confidence and household spending as the country emerges from the recent economic downturn. This will support growth in life insurance premiums as well as core non-life lines such as motor vehicle and property insurance.

Although Spain exited recession in late 2013, we believe that...

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Medical Devices

Spain Medical Devices

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BMI Industry View: We forecast low medical device market growth over the 2013-2018 period, as pre-crisis import growth levels are unlikely to return. The market size continues to be attractive to multinationals, while medium-sized national companies, focused on export markets to counterbalance contained sales in the internal market and still sizeable SNS debts, will be threatened by an ailing demand from core eurozone economies. Most of the market will remain...

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Spain Metals

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BMI View: The outlook for Spain's metals sector is steadily improving once more, with production increases paving the way for a lagging uptick in production too. After a contraction in both domestic steel consumption and production of three and four years, respectively, from 2011 onwards, BMI   estimates a more positive environment of growth on both fronts going forward. Output in Spain returned to growth in 2013 with a 4.49% y-o-y increase in activity to 14,252,000 tonnes, followed by an estimated increase of 1.2% y-o-y in 2014 to 14,423,000 tonnes with...

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Oil & Gas

Spain Oil & Gas

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BMI View: Although current domestic production of oil and gas is negligible, with imports meeting around 99% of current demand, we are witnessing a gradual but notable uptick in investment targeting Spain's upstream. The acceleration of onshore and offshore activity could cut Spain's hefty import bill, but there are political and regulatory risks that hold sizeable downside risks to both conventional and unconventional efforts. However, the environment ministry has recently allowed deepwater drilling off the Canary Islands and the Supreme Court has granted Repsol the authorisation to start exploration after the permit had been legally challenged by local authorities. Despite this success, the company announced it had abandoned the project in January 2015 after initial exploration proved unsuccessful. In November 2013 the central government legalised the process of hydraulic fracturing. However, while we...

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Spain Petrochemicals

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BMI View: The Spanish petrochemicals industry continued to show solid growth in Q115, although it is only just approaching 2010 levels following a collapse in output in 2013. However, BMI's latest Spain Petrochemicals Report warns that the industry is still facing a weak domestic market and volatile and uncertain markets that could scupper the recovery, although a contraction is unlikely.

Spain's economic recovery is gathering pace with positive effects for its petrochemicals industry. In Q115, chemicals output in the year to date grew 2.6%, while rubber and plastics grew 6.0%. This compares with chemicals growth of 4.6% and rubber and plastics growth of 4.4% in 2014. However, the industry is still highly exposed to external risk due to sluggish domestic demand; while the automotive industry is a major domestic consumer of...

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Pharmaceuticals & Healthcare

Spain Pharmaceuticals & Healthcare

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BMI View: Spain's non-transparent and unpredictable government medicine pricing system and the implementation of numerous emergency measures to contain pharmaceutical spending will highly disrupt multinational drugmakers' strategy and revenue streams. Despite the Spanish economy exiting crisis mode, we believe that the Spanish government will continue to target the healthcare sector - a large recipient of government funds. As a result, we uphold our bearish outlook for the Spanish pharmaceutical market over the next five years.

Headline Expenditure Projections

  • Pharmaceuticals: EUR23.02bn (USD30.85bn) in 2014 to EUR22.36bn (USD24.60bn) in 2015; -2.9% in local currency terms and -20.3% in US dollar terms. Forecast in line with last...

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Spain Power

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BMI View : Spain's power sector is very well developed, with extensive generation and capacity making the country a net electricity exporter. As a mature market there are few new developments in the pipeline and we expect generation to remain largely stagnant over the forecast period, though renewables do provide some capacity for growth. An uncertain regulatory environment and limited consumption growth will likely continue to deter investors, and many of Spain's large electricity firms are increasingly focused on overseas opportunities.

Non-hydropower renewables will see the most consistent growth over the forecast period, with a range of both wind and solar power projects in the pipeline, adding to total generation. We expect non-hydropower renewables generation to increase from 68.6 terawatt hours (TWh) in 2015, around a quarter of total generation, to...

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Spain Renewables

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BMI View: Spain's efforts to rejuvenate its renewables industry by following a more cautious and controlled approach to attracting investment is a positive development for the sector and presents upside to our 10-year renewables growth forecasts. We believe this approach will gradually re-start capacity growth as investors regain confidence in the market. However, we expect this growth to be significantly slower than historical rates, as caps on capacity additions and project profitability will mean investors look elsewhere for better growth opportunities.

A number of regulatory changes over 2013 and the beginning of 2014 have rocked Spain's renewables industry. Coupled with the country's depressed economic picture, these reforms have dented investor confidence and created...

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Spain Retail

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BMI View: Spain's economy will see a significant recovery over 2015 and 2016, and our expectations of economic strengthening are supported by news of real GDP growth of 2.6% year-on-year (y-o-y) in Q115. An overreliance on private consumption for growth and uncertainty surrounding the country's 2015 general election will pose risks to economic recovery, though they do present advantages to the retail sector as collapsing global oil prices have boosted Spanish household disposable incomes and supported greater consumer spending.

Household spending will be the main driver of real GDP growth over 2015 and 2016, adding 1.0 percentage points to growth in both years according to our forecasts. This will mainly be driven by a gradual improvement in consumer confidence, the government lowering income tax by an average of around 12% in 2015 and recovering real...

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Spain Telecommunications

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BMI View: The Spanish market is slowly returning to growth, in line with economic recovery, but over the long-term BMI believes that the market has passed its saturation point and organic growth opportunities are limited. However, data services are a bright spot for the market with early returns on 4G investment proving to be strong. The rise of alternative operators through lower pricing strategies has also been a success story in Spain, but this has also led to decreasing operator revenues. We expect M&A trends to continue over the next year or two, as the telecoms sector is facing a slow recovery throughout mobile, fixed line, broadband and pay-TV.

Key Data

  • Spain's mobile market saw net additions in Q115 growing by 1% year-on-year...

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Spain Tourism

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BMI View : Spain, given its pleasant climate and a good range of activity options, has historically been one of the most popular holiday destinations globally, especially for tourists from within Europe. When the global financial crisis hit Europe, however, Spain's tourism industry was seriously affected, as many potential tourists could not afford to travel. Although perhaps slightly more sluggish in its recovery than some other European economies, Spain is now looking forward to strong growth over the coming years, due in no small part to the once again increasing tourist numbers from a rejuvenated Europe. The country is also benefiting from the situations...

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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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