Spain reaches a new European summit

Spain received more than thirty billion dollars of Foreign Direct Investment last year becoming one of only eight countries to surpass twenty-seven billion dollars. The full total invested in Spain during 2016 was 30,776 million dollars or 22, 281 million euros.

This comes from the latest OECD report which names the other seven countries as the UK, the USA, Australia, Belgium, France, Canada and the Netherlands. The figures put Spain on a par with France and the Netherlands, who received 34 and 33 billion dollars respectively, but some way behind the USA and the UK into which 395.9 and 253.7 billion respectively was invested.

It still represents great strides for Spain with foreign investment growth having risen 22 per cent on the previous year, significantly higher than the EU average of a 17 percent increase.

And things look good for this year too as, just since January, the country received more than six billion dollars in investment, already exceeding the total for the last quarter of 2016.

ATTITUDE SWITCH

The type of investment is changing as well. Up to 2015 the increase in foreign investment had focused on the purchase of debt and investments in portfolios which were volatile and sensitive to the economic cycle. But coming into 2016 the emphasis became more on direct investment as portfolio investment fell. Direct investment is a more stable type of investment and has a greater effect on productive sectors meaning it can greatly help to increase productivity. Real estate also became a strong attracting factor as this sector continued to recover from the crisis.

To see a direct line of the recovery since 2008, foreign investment started growing again in 2014 then really strengthened during 2015 to a level of more than 2.6 times higher than it had been in 2008. It is expected to hold strong during 2017 and then to pick up again slightly in 2018.

FORESIGHT WAS 20/20

This activity shows that ICEX was right on the money recently when it said that there were strong foundations for sustainable economic growth and that Spain was becoming more competitive in the European market place.

And in its own latest report, ICEX said there were foundations for sustainable growth with some of the main results coming from the labour market reform. There, it said, it had seen increases in flexibility, productivity, employment and training with Spain also generating 36.6 of all employment created in the Euro area since 2014.

Foreign investors have demonstrated confidence in the results with a recent study of 500 companies showing that 95 per cent of them were expected to maintain or increase their investments in the country between 2016 and 2018. Companies from Germany and the USA were the most optimistic about the immediate upcoming years.

This positive development is also in tandem with the upturn in corporate trading in Spain which rose a massive 1.3 billion euros to six billion in the first weeks of 2017 as compared to the last quarter of 2016 which yielded 4.7 billion.

For more information, please contact corporate law firm Argali Abogados.

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