Economic outlook of Spain today – and what are the prospects for the country?

Spain is experiencing a favorable economic situation. Its growth rate has been at least 3% per annum in real terms over the three previous years (2015-2017). The economy is expected to keep growing in the upcoming years at a slightly more moderate pace.

Unemployment continues to decrease due to strong job creation, which combined with favourable financial conditions boosts private domestic demand.

Prices remain stable resulting in moderate inflation, which is expected to gradually decrease. Public deficit is decreasing and debt rating A- (S&P).

Which kinds of business opportunities are there for Finnish companies in Spain?

Given that a significant percentage of Finland’s total exports are related to machines and mechanical equipment, technology-intensive sectors in Spain will be appealing for Finnish companies. For example, automotive and aerospace, and other sectors in which Finland has specialized such as those related to the timber industry and paper.

The tourism sector also offers great potential with investments in tourism infrastructure in tourist areas that are still not saturated. Spain has sophisticated tourism management know-how, including in ecological tourism, that can be of interest to Finnish companies interested in developing this sector in the North of Finland.

Please, also explain us which kinds of investment opportunities there are for Finnish companies in Spain?

In my opinion, there are good opportunities for Finnish companies to invest with Spanish firms in cybersecurity, fintech, e-health and healthtech, software development, artificial intelligence, videogames, 3-D, smart cities, education software and in circular economy.

The biotechnology sector is developing fast and the increase in the use of renewable energies is generating investment opportunities in green technologies. Also, Spain is the largest European producer of organic foodstuff, especially in the production for legumes, nuts, and sea products.

There are new, interesting initiatives on the sub-national level as well, such as the Málaga Valley, an innovative ecosystem on the southern coast of Spain, and another project, Distrito Digital in the province of Alicante also on the Mediterranean coast.

There is good potential for companies from our two countries to go hand in hand in third markets, such as in Latin America, the North of Africa, India and China.

If a Finnish company decides to invest in Spain, what are the most important issues this enterprise has to take into ist consideration to succeed in the market?

There is a large, established Finnish population already living in Spain for many decades, with a vast network of acquired knowledge and extensive networks, and this undoubtedly entails many advantages as a starting point for Finnish companies. To that I would add that Spain has a highly efficient transport network, and a good quality of life for expatriates. Spain is a country where e-government has penetrated the culture deeply, and interactions with government offices are smooth and fast. Finally, the level of corruption in the civil service is inexistent, which means that a Finnish company would get any licenses or approvals that it might need without uncertainty and without bribes. Finally, I would add that according to the World Bank 2019 Doing Business Report Spain ranks very high in the ease with which a company can enforce the contracts it has entered; as well as in the strength of minority investor protection; and in the timeliness and cost to trade across the border, in which we have been ranked #1 in the world.

The business culture in Spain is flexible and able to adapt without trauma to unexpected contingencies or changing needs of their foreign clients. I would also like to highlight that in general Spanish companies have a long-term goals in business relations, which means that they will not generally aim to maximize short-term profit, but instead to develop a mutually satisfactory relationship with their clients that will last.

Which kind of assistance and benefits there are in Spain for Finnish companies which would like to invest in Spain?

Invest in Spain – a division of ICEX, Spain’s Trade and Investment public corporation - helps foreign companies to enter the Spanish market with customized, personalized assistance to facilite their decision-making process. Of course, foreign investors benefit from the principle of free establishment and non-discrimination, meaning that they have the right to operate their business under the same conditions as any Spanish investor, and to apply for the incentives that the government offers in some sectors, such as grants, tax relief under certain conditions, professional training for their workforce and preferential access to credit.

We know Spain as a great holiday destination for Finns. Please, tell us more about the tourist attractions and holiday resorts in your country.

Spain is known for its great variety of beaches, mountains, landscapes, the Way of Santiago, city life, festivals, beautiful countryside villages and their gastronomy, as well as for its nightlife, sports opportunities, cultural offerings, historic sites and the “vías verdes”, old railway lines that crisscross the countryside and that fallen out of use and have been transformed into trekking paths.

Significant urban tourist destinations are Madrid, Barcelona, Granada and the Alhambra, Sevilla, Córdoba, Mallorca, Ibiza, Tenerife, Fuerteventura, Lanzarote, Gran Canaria (Canary Islands) and the so-called and less visited “green Spain” along the northern coast.

- Madrid: the Prado Art Museum, Retiro Park, Gran Vía, Royal Palace.

- Barcelona: the Sagrada Familia, Park Güell, Barceloneta, Antonio Gaudí.

- Granada: the Alhambra Palace and its gardens, flamenco shows, Sierra Nevada ski.

- San Sebastian: landscape and gastronomy in the city with highest number of Michelin starred restaurants in Spain.

- Santiago de Compostela: a historic city with religious importance and a UNESCO World Heritage site.

- Bilbao: the Guggenheim Museum, and the famous pintxos.

- Ibiza: sophisticated nightlife in a beautiful island.

- Visiting Visigoth and Romanesque churches in Palencia.

Natural parks and mountainous regions:

- Ordesa and Monte Perdido National Parks.

- Sierra de Guara in the Pyrenees Mountains.

- Ciudad Encantada (near Cuenca).

- Altamira caves, with pre-historic wall paintings the earliest of which were executed around 36,000 years ago and discovered in 1868.

- Guadalquivir River valley (the longest river in Andalucía).

- The Timanfaya Park in volcanic Lanzarote.

- The Teide, Spain’s highest peak, a volcano, and its surrounding national park in Tenerife

- Doñana National Park in Huelva, refuge for uncountable migratory birds.

- Picos de Europa mountain range in Northern Spain.

- Sierra Nevada National Park in Granada, Andalucía.

Outdoor activities

- Ski and winter sports resorts: Granada, the Pyrenees in Aragon and Catalonia, trekking in Cantabria.

- Windsurfing: Tarifa along the Costa de la Luz

- Beaches: Balearic Islands, the Costa del Sol, Almería, Murcia, Catalonia, Galicia, Asturias, Cantabria and San Sebastián.

- Golf: Costa del Sol, Murcia, Almería, Valencia and Tenerife.

Presentations on Spain at the seminar organised in Helsinki on the 8th November 2018
can be read here.

Questions: Anne Hatanpää, Finland Chamber of Commerce
Answers: the Spanish Embassy in Finland

November 25, 2018

Interview with the representatives of the Spanish Embassy in Finland