Euromoney Country Risk

EUROMONEY COUNTRY RISK

Read the latest analysis on sovereign, geo-political and structural risk

 
Get up to date country risk ratings in 186 countries

Member login



Lost your password?

Euromoney Country Risk

Euromoney Country Risk
List of countries.

Spain Spain

Overview Change score Analyses Experts
 
Sponsored section
Spain – Quick View
ECR score66.71 (Mar 2011)
ECR rank36 (Mar 2011)
Economic
GDP (Q4 2010)USD 364.27 billion
GNI per capita PPP (2010)USD 29,661
FDI inflow 2009USD 648,967.98 million
Inflation 20101.8%
Central bank assetsUSD 303,875.20 million
Unemployment rate (Q4 2010)20.33%
Government deficit (till Nov 2010)USD 40.90 billion
Tax revenue (till November 2010)USD 199,907.89 million
Political
Government typeParliamentary Monarchy
Recent political crisisNA
Economic freedom score31st
Freedom of information score39th
Corruption perception index30th
Structural
Birth rate10.73 per ‘000
Population balance0 to 14 – 14.8%
Population balance60 and above - 22.2%
Life expectancy yearsMales - 77.77 years
Life expectancy yearsFemales – 84.11 years
Mortality rate8.35 per ‘000
Literacy rate97.6%
Internet access(2010)62.6%

[Top] Economic Overview

Spain's mixed capitalist economy is the 13th largest in the world, and its per capita income roughly matches that of Germany and France. However, after almost 15 years of above average GDP growth, the Spanish economy began to slow in late 2007 and entered into a recession in the second quarter of 2008. GDP contracted by 3.7% in 2009, ending a 16-year growth trend, and by another 0.1% in 2010, before turning positive in 2011, making Spain the last major economy to emerge from the global recession. The reversal in Spain''s economic growth reflected a significant decline in construction amid an oversupply of housing and falling consumer spending, while exports actually have begun to grow. Government efforts to boost the economy through stimulus spending, extended unemployment benefits, and loan guarantees did not prevent a sharp rise in the unemployment rate, which rose from a low of about 8% in 2007 to over 20% in 2011. The government budget deficit worsened from 3.8% of GDP in 2008 to 9.2% of GDP in 2010, more than three times the euro-zone limit. Madrid cut the deficit to 8.5% of GDP in 2011, a larger deficit than the 6% target negotiated between Spain and the EU. Spain''s large budget deficit and poor economic growth prospects have made it vulnerable to financial contagion from other highly-indebted euro zone members despite the government''s efforts to cut spending, privatize industries, and boost competitiveness through labor market reforms. Spanish banks'' high exposure to the collapsed domestic construction and real estate market also poses a continued risk for the sector. The government oversaw a restructuring of the savings bank sector in 2010, and provided some $15 billion in capital to various institutions. Investors remain concerned that Madrid may need to bail out more troubled banks. The Bank of Spain, however, is seeking to boost confidence in the financial sector by pressuring banks to come clean about their losses and consolidate into stronger groups.

Source: CIA Factbook

The country’s major exports include machinery, motor vehicles, fruit, wine, and other food products and pharmaceuticals. Major imports include machinery and equipment, fuels, chemicals, manufactured goods, foodstuffs, and medical instruments. Spain’s major trading partners include France, Germany, Portugal and Italy.

Spain's GDP growth contracted by 0.4% in the second quarter of 2012 over the previous quarter. 

 

GDP

(Source: World Economic Outlook Database October 2012)


Gross Domestic Product per capita (PPP): Spain's GDP per capita rose 12.30% from 2005 to 2008 reaching it highest point ofat $30,653.63. The estimate for 2012 is slighlty lower and is at $30,412.15.

 

GDP per capita PPP

(Source: World Economic Outlook Database October 2012)

 

Gross national income (GNI) per capita was $26,508 as of 2011. 


GNI

(Source: UNDP)

Individual income tax

Income taxes on individual incomes in Spain is taxed progressively from 24.75% to 52%.


Spain personal annual tax rates 2012 (EUR)

From (EUR) To (EUR)

Total %

0 - 17,707

24.75

17,707 - 33,007

30

33,007 - 53,407

40

53,408-120,000

47

120,001 - 175,000

49

175,001 - 300,000

51

300,001 and over

52


Corporate tax

Spain's corporate tax rate for 2012 is 30%, however small companies pay 25% OF INCOME OF UP TO 120,202€

(Source: worldwide tax

 

 

Inflation rate

Inflation
(Source: World Economic Outlook Database October 2012)

 

 

FDI inflows

FDI inflows to Spain increased during the 1980s after the entry of Spain in European Economic Community. Spain became one of the favourite destinations for foreign money. Foreign direct Iinvestment in Spain in 2009 stood at EUR 1,842,726.2 million.

 

  Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12
FDI (EUR Millons) 438,877 448,119 449,310 454,712 469,652 477,685 471,144 468,751 482,498 481,224 485,490

FDI

(Source: Central Bank of Spain)

 

Net International Investment Position:

Spain's net IIP has deteriorated  significantly since the financial crisis in 2008 to a level of -92.50% at the end of 2011. 

 

Net IIP

(Source: Central Bank of Spain) 

 

 

Banking sector assets

 

SUMMARIZED BALANCE SHEET OF THE BANCO DE ESPAÑA AS AT 30 NOVEMBER 2012

CONCEPTS

EUROS

ASSETS

Gold and gold receivables.

12.011.355.930,13

Claims on non-euro area residents denominated in foreign currency.

27.135.510.404,99

Claims on euro area residents denominated in foreign currency.

4.620.395.428,96

Claims on non-euro area residents denominated in euro.

812.587.424,73

Lending to euro area credit institutions related to monetary policy.

358.337.034.786,88

Other claims on euro area credit institutions denominated in euro.

4.361.727.733,57

Securities of euro area residents denominated in euro.

97.974.450.821,28

General government debt denominated in euro.

2.915.047.581,26

Intra-Eurosystem claims.

39.002.181.820,92

Items in course of settlement.

3.155.035,44

Other assets.

4.972.557.170,66

 TOTAL ASSETS

552.146.004.138,82

LIABILITIES

Banknotes in circulation.

97.146.480.270,00

Liabilities to euro area credit institutions related to monetary policy.

43.416.030.287,46

Other liabilities on euro area credit institutions denominated in euro.

63.213,18

Debt certificates issued.

0,00

Liabilities to other euro area residents denominated in euro.

15.517.820.467,75

Liabilities to non-euro area residents denominated in euro.

163.873.542,04

Liabilities to euro area residents denominated foreign currency.

898.580,03

Liabilities to non-euro area residents denominated in foreign currency.

778.620,82

Counterpart of special drawing rights allocated by the IMF.

3.341.879.103,84

Intra-Eurosystem liabilities.

366.048.233.744,50

Items in course of settlement.

138.971.801,91

Other liabilities.

4.940.502.066,37

Provisions.

6.166.193.613,52

Revaluation accounts.

13.314.278.827,40

Capital and reserves.

1.950.000.000,00

 TOTAL LIABILITIES

552.146.004.138,82

                                                                         (Source: Central Bank Of Spain. http://www.bde.es/webbde/es/estadis/infoest/aa101e.pdf)

The table below displays the assets Central Bank of Spain as of 31st December 2011. The total assets were EUR 355,567.23 million.

Currency Unit: EUR million

Balance Sheet – Assets of Central Bank of Spain

 

2011

2010

Gold and gold receivables

11,017.18

9,55.49

Claims on non-euro area residents denominated in foreign currency

25,019.85

14,040.29

Claims on euro area residents denominated in foreign currency

4,250.73

0.06

Claims on non-euro area residents denominated in euro

844.31

907.25

Lending to euro area credit institutions related to monetary policy

operations denominated in euro

168,196.45

61,550.47

Other claims on euro area credit institutions denominated in euro

2.74

2.04

Securities of euro area residents denominated in euro

106,385.64

87,827.96

General government debt denominated in euro

3,498.51

4,081.98

Intra-Euro system claims

32,177.68

20,945.82

Items in course of settlement

1.29

1.06

Other assets

4,172.85

3,708.73

Total Assets

355,567.23

202,621.16

(Source: Central Bank of Spain)

[Top] Financial Indicators & Government Financial

 

 

 

Sovereign debt dynamics

 

 

 

Gross Domestic Debt 

Spain's estimated debt-to-GDP figure for 2012 is 90.69%. 

deb-to-gdp

 

Spanish Long-term interest rates (10-year Note Yield) 

 

 

10y yields(Source: ECB)

[Top] Labour Force and Employment Overview

The total population aged above 16 was recorded 38.33 million at the end of Q4 2012. The economically active population was 22.9  million in the same period. Of the total economically active population, 16.95 million people were employed. Of the economically active population, 10.51 million were females and 12.41 million were males

 

At the end of 2012, a majority of the employed population was in the services sector followed by the industry, construction and agriculture sectors. 

 

Employed population (Q4 2012)

Total

16.95

Agriculture

0.784

Industry

2,383.5

Construction

1,073.9

Services

12,715.6

(Source: National Statistics http://www.ine.es/jaxiBD/menu.do?L=0&divi=EPA&his=0&type=db)

The unemployed rate in Spain reached 24.63 % at the end of the second quarter of 2012. This is  the highest recorded unemployment rate in Spanish history and highest among the eurozone countries. The youth unemployment rose to 53,28% in Q2 2012 which is about 7% higher than in Q2 2011. 

(Source: National Statistics)

Spanish Unemployment Rate 

(Source: National Statistics)

Minimum wage

Minimum wage limits prevailing in the country in 2012 remained the same as 2011 at EUR 641.4 per month and EUR 21.4 per day.

Minimum wage

Daily (EUR)

Monthly (EUR)

2005

17.1

513

2006

18

540.9

2007

19

570.6

2008

20

600

2009

20.8

624

2010

21.1

633.3

2011

21.4

641.4

2012

21.4

641.4

(Source: National Statistics)

Level of unionisation

The major trade unions in Spain are:

  • Trade Union Confederation of Workers' Commissions (CCOO): has about a million members and is independent of any political body.
  • General Workers' Confederation (UTG): has about 840,000 members and is linked to the Spanish Socialist Workers’ Party (PSOE)

(Source:fedee.com)

[Top] Political Stability

 

Spain is a democratic constitutional monarchy, with a national parliament (a Cortes Generals). The country is divided into 17 parts known as autonomous communities. Each of the autonomous community has their own executive, legislative and judicial power.

 

The parliament is formed by the Congress of Deputies and the Senate. The Congress of Deputies has 350 members who are elected for a term of four years. The Senate has 264 statutory members, of which 208 are directly elected. The remaining 56 members are indirectly elected by the 17 Autonomous Communities. The members of the Senate are also elected for a term of four years.

 

Major political parties in the SPAIN CONGRESS include:

 

 

(Source Spain Congress http://www.congreso.es/portal/page/portal/Congreso/Congreso/GruPar)

The head of state is the King Juan Carlos I, who is the titular head. The prime minister of the country is Mr.Mariano Rajoy 

(Source: Goverment of  Spain  http://www.lamoncloa.gob.es/IDIOMAS/9/Gobierno/index.htm)

Regulatory environment in Spain

 

Country’s economic freedom score is 70.2, making its economy the 31st freest in the 2011 Index of Economic Freedom. Spain ranks 17th out of 43 regional countries in the European region. Spain’s overall score is above the world and regional averages.

 

 

 

 

 

(Source: Heritage.org)

 

Corruption perception

 

The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Spain is ranked 30th on this list, which indicates that the corruption levels in the public departments in the country is moderate.  Spain has moved up on the CPI rankings since 2010, when it was ranked 32nd with a score of 6.1, which indicates the perceived levels of corruption have decreased in the country.

 

(Source: transparency.org)

 

Freedom of information

 

Spain is ranked 39th in the World Press Freedom Index 2010, with a score of 12.25, indicating that media in Spain is free and has limited restrictions. 

 

(Source: rsf.org)

 

Newspapers

 

Major newspapers in the country include:

 

  • El Mundo
    • El Pais 
    • ABC
    • La Razon
    • La Vanguardia
    • El Periodico de Catalunya

 

(Source: BBC)

 

Judicial system

 

Justice in Spain is administered through courts and tribunals as established by the Organic Act of the Judicial Power.

 

The General Council of the Judicial Power has jurisdiction over the entire country. Other subordinate bodies include:

 

  • Government Chambers of the Supreme Court
    • National High Court (Audiencia Nacional)
    • High Courts of Justice

 

The Supreme Court is the apex court in the country where in the President of the Supreme Court is appointed by the King. However, the High Courts of Justice are the highest authority for respective autonomous communities.

(Source: Interpol)

[Top] Demographic Overview

The total population of Spain for January 2011 was 47.19 million people, of which 23.9 million were female and 23.3 million male.

(Source: National Statistics)

 

population by gender

 

The gender ratio in the country is balanced, there are about 97 males for every 100 females in the country.

International migrant stock till mid 2010 was recorded at 6,377,500 individuals, or 14.1% of the entire population.

(Source: UN)

The birth rate in Spain slowed down in 2009 after a decade of continuous growth. Specifically, the birth rate dropped to 10.73 births per thousand inhabitants.

(Source: National Statistics)

The total life expectancy in 2007 was 80.94 years. Specifically, for males, life expectancy was 77.77 years and for females  it was 84.11 years.

(Source: National Statistics)

In 2009, a total of 383,486 deaths were recorded, decreasing 0.7% from 2008.

(Source: National Statistics)

The infant mortality rate in 2007 was 3.52 per 1,000 births. Furthermore, the mortality rate was 3.74 in the case of male children and 3.28 in the case of female children.

(Source: National Statistics)

The latest figures reveal that the urban population in the country grew at an annual rate of 1% between 2005 and 2010. For the same period, the rural population grew at a slower rate of 0.2% per year. According to the 2007 figures, 77% of the population lived in urban areas.

(Source: UN)

Ethnic groups in Spain include:

·         Basques

·         Catalans

·         Galicians

A large proportion of the population is Roman Catholic along with a minority of other religious populations including Protestants, Jews and Muslims.

(Source:  State.gov)

The country ranks 20th out of 169 countries on the Human Development index 2010 conducted by the United Nations Development Programme (UNDP). The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).

(Source: UNDP)

[Top] Soft Infrastructure

Education

The adult literacy rate of Spain was 98% in the period of 2005 to 2008.

(Source: UNICEF)

Education in Spanish schools up to the age of 16 is free to all children. School attendance is compulsory between the ages of 6 and 16. Spanish is the official language of instruction in educational institutes.

Education in the country is funded by both public and private funds. About 80% of the total expenditure is by public funds including state, autonomous and local authorities.

(Source: european-agency.org)

Healthcare

The National Health System (NHS) in Spain includes the central government and independent public authorities in various regions. All citizens are provided access to the public health services through the Individual Healthcare Card.

The healthcare system in the country is divided into two levels:

·         Primary Healthcare: includes healthcare centres at the regional level that provide basic healthcare services along with health promotion and disease prevention.

·         Specialist care centres and hospitals

As of 2010, the NHS had 2,914 health centres and 10,202 local clinics. Of the 804 hospitals operating in Spain, 465 were privately run.

The total health expenditure in 2007 was EUR 88,828 million. Furthermore, of the total healthcare expenditure 71.8% or EUR 63,768 million was on public health. The total healthcare expenditure amounts to 8.5% of the country’s GDP. Furthermore, public health expenditure accounted for 6.1% of the GDP, at the rate of EUR 1,421 per inhabitant.

Public healthcare expenditure, 2007 (%)

Hospital and specialist care services

54

Primary healthcare services

15.7

Public health services

1.4

Collective health services

3.1

Pharmacy

19.8

Transportation, prosthesis & therapeutic products

1.8

Capital Expenditure

4.3

(Source: Ministry of Health)

[Top] Hard Infrastructure

The transportation system in Spain is well developed and includes roadways, railways and airways.

The urban areas in Spain have both buses and suburban railways.

About 49% of the total spending on transport is for railways. As of December 2008, the length of the railway network was 15,476 km. The major metropolitan areas in Spain are serviced by commuter trains called Cercanias.

(Source: Spain Government)

Ports in spain

Major ports in the country include Barcelona, Algeciras, and Bilbao. Other ports in the country include Cadiz, Cartagena, Castellon de la Plana, Ceuta, Huelva, Coruna, Las Palmas (Canary Islands), Malaga, Melilla, Pasajes, Gijon, Santa Cruz de Tenerife (Canary Islands), Santander, Tarragona, Valencia and Vigo.

(Source: world port source)

Airports

The Madrid Barajas International Airport is the busiest airport in Spain, and one of the busiest hubs in Europe. The second-largest international gateway in Spain is El Prat de Llobregat Airport, located in Barcelona.

Other airports in the country include:

 

Town

Airport name

Rwy length

Almeria

Almeria

10,400 ft

Barcelona

El Prat

10,100 ft

Palma De Mallorca

Palma De Mallorca

10,700 ft

Gran Canaria

Gran Canaria

10,100 ft

Madrid

Barajas

14,200 ft

Madrid

Torrejon

13,400 ft

Malaga

Malaga

10,400 ft

Rota

Rota Navy

12,100 ft

Vitoria

Foronda

11,400 ft

Zaragoza

Zaragoza

12,100 ft

Santiago

Santiago

10,400 ft

Seville

Moron AB

11,800 ft

Seville

San Pablo

11,000 ft

Tenerife-North

Los Rodeos

11,100 ft

Tenerife-South

Reina Sofia

10,400 ft

 

(Source: Air charter world)

Telecommunications networks

In 2010, 29.1 million people used internet services, as compared to 27.03 million people in 2008.

Euromoney country risk banner
 
All material subject to strictly enforced copyright laws.
© 2017 Euromoney Institutional Investor PLC.