Are you paying attention? For many years Spain’s economy was in a slug. But, they are back! With figures well above EU average. Lees verder
The World Economic Forum Global Competitiveness Report is an annual assessment of the factors driving productivity and prosperity in 140 countries.
How are Spain and the Netherlands performing and what are their strongest and weakest pilars that build their competitive economy?
A survey published by international realtors CBRE shows that an increasing number of investors are moving up the risk curve to achieve the best returns available to them. 70% of respondents favoured Western Europe as an investment destination with Spain surging 9 places up CBRE’s 2013 rankings to take second place to the UK as ‘Most Attractive Global Region for Investment’.
Economic indicators coming from Spain from Q4 2013 through to Q1 2014 show a consistent improvement in the nation’s financial position. There was also a strong proportionate rise in turnover in the Spanish investment market in 2013 with sales totalling €5 billion for the year – more than twice the revenue in 2012.
The dramatic increase in investor confidence in Spain reflects the easing of concerns surrounding the Eurozone sovereign debt crisis and positive investor perceptions of recovery potential. The research also shows that the majority of investors view Spain as the most attractive market for commercial real estate and acquisitions are increasing dramatically as a consequence.
In January 2014, Foreign Direct Investment (FDI) rose to €3324.53m compared with €3028.20m achieved in January 2013 with a total increase in FDI of 8.8% to €15.8bn being recorded for the year. There is still a significant margin for improvement on the 2007 peak when FDI totalled a staggering €23218.65m although steadily improving fundamentals indicate a positive outlook for future growth.
According to Deloitte, Spain could see as much as €40bn in FDI revenue in 2014 which would break all records for the nation. Deloitte’s President, Fernando Ruiz said: “There will be an improvement for Spain obviously, although the picture from the outside is much better than from the inside” in reference to the fact that over 50% of Spanish nationals are in considerable debt with one in four currently unemployed.
The effects of the Spanish government’s austerity measures which included reductions in wages for most nationals are still very much taking their toll on the population leading to speculation that the recent enthusiasm shown by foreign investors is somewhat previous.
Luis Garicano, a professor at the London School of Economics describes the recent increased appetite for Spanish assets as “an excessive reaction”. He continues: “I think what you see is a picture of stabilisation, but there is still large volatility and potential for accidents. Financial markets are being too sanguine about the underlying structural problems in Spain, where the reality on the ground is still tough.”
However, foreign investors could argue that continued domestic struggles are the reason behind assets remaining cheap and when factoring in even a slow recovery in coming years, there is clearly plenty of investment value to be realised, particularly for those looking to invest and hold over longer terms.
The current phase of gradual recuperation marks a profoundly welcome change compared to the financial drama of 2012, when Madrid was forced to plead for an EU banking bailout. In terms of the domestic market, high debts, a largely stagnant housing market and a dearth of bank credit will continue to weigh down economic progress but with increasing foreign investment set to contribute record revenues to Spain’s economy, there is light at the end of the tunnel.
Spain announced recently it has retaken the number three spot in world tourism in 2013, overtaking China by luring a record 60.6 million international visitors.
Foreign tourist arrivals surged by 5.6% in the year, the government said, boosting the Eurozone’s fourth largest economy after a long, job-wrecking recession.
”The new figures for 2013 allow our country to retake the number three position in this indicator after having overtaken China,” Prime Minister Mariano Rajoy boasted.
Spain now stood behind only France with 83 million international tourist arrivals and the United States with 67 million, Rajoy said.
Income from foreign tourists hit record levels, too, a significant contribution to the Spanish economy, which has just emerged from five years of stop-start recession that left the nation with a 26% unemployment rate.
Spending by international tourists in the first 11 months of 2013 surged by 8.7% from the same period last year to Euro 55.9bil (RM254.27bil), government figures showed.
Even without the official figures for the whole year, it is already possible to say that 2013 was a record in terms of tourism spending, Rajoy said.
”The implications of these figures are clear to everyone,” Rajoy said.
The tourism industry accounted for 10.9% of Spain’s total economic output in 2012, and 11.9% of all jobs, the prime minister said.
British tourists led the way to Spain in 2013, with some 14.3 million of them accounting for 23.6% of all foreign tourists, said the report by Spain’s Industry, Energy and Tourism Ministry.
Next came Germany with 16.2% of the total, France with 15.7%, and Nordic countries with 8% .
Russian tourists accounted for 2.6% of the total, but their numbers showed the biggest leap, soaring by 31.6% from the previous year.
The top destinations in Spain were Catalonia, which drew 15.5 million foreign visitors, or 25.7% of the total, followed by the Balearic Islands such as Majorca with 11.1 million international arrivals, or 18.3% of the total.
Spanish tourism industry association Exceltur predicts the tourism industry will grow by 1.8% in 2014.
Besides Spain’s attractions, such as its beaches, the tourism industry said it benefited last year from misfortune in Egypt, where political turmoil scared away visitors.
Egypt lost 2.5 million tourists from June up to the end of the year, estimated Exceltur vice president Jose Luis Zoreda. “Curiously, Spain’s tourists grew by 3 million,” he added.
Many of the visitors diverted from Egypt were budget tourists, however, Zoreda said.
Spain’s economy emerged from a two-year downturn by posting 0.1% growth in the third quarter of 2013. The economy expanded by 0.3% in the final quarter, Spain’s prime minister said, confirming an estimate by his finance minister ahead of the release of official data.
The Spanish government is tipping an overall economic expansion of 0.7% in 2014.