Over 300 Spanish and British business leaders representing over 200 companies met in London on Thursday within the framework of the State visit by the King and Queen of Spain to the United Kingdom. At the official opening of the event, King Felipe VI highlighted the importance of trade exchanges between the two countries, which amount to over 30 billion euros.
He added that the strength in trade exchanges and investment demonstrates the sound judgement by the two countries in their firm commitment to economic openness. The United Kingdom, he said, launched an extensive deregulation programme and Spain has joined that open market and deregulation initiative in recent decades, leading to considerable progress and increased well-being.
In his speech, King Felipe VI considered that Spain is a healthy environment for British companies and highlighted some of the main strengths, such as transport infrastructures, the quality of human capital and the cutting-edge developments in such sectors as renewable energies, biotechnology, health and smart cities, where Spanish companies are leading the world.
Similarly, he underlined the interest from Spanish companies in the United Kingdom, a preferred destination for internationalisation processes thanks to the ease with which foreign companies can launch operations and the country’s legal certainty.
Also within the framework of this business meeting, the State Secretary for Trade, Marisa Poncela, reviewed the situation of the Spanish economy, which has experienced its worst economic crisis of the last 50 years but which, in the last three years, has grown faster than the largest EU countries and is creating jobs at a fast pace.
The foreign trade sector, explained the State Secretary, has made a significant contribution to the country’s recovery from the crisis and has increased its percentage in GDP significantly: from 25% before the crisis to 33% now, which makes Spain the second-most open economy of all the major EU countries. Furthermore, the growth in exports of Spanish goods and services is higher than the growth in global trade, which shows that Spain is gaining competitiveness.
The State Secretary also highlighted the strong recovery in the current account balance: from deficits of close on 10% of GDP before the crisis to a surplus of 2% of GDP in 2016. Spain has posted four straight years of surpluses and there will foreseeably be at least four more. The data show that Spain has a more balanced growth model today, with contributions from both domestic demand and exports.
For Spain, the United Kingdom is the fourth-largest purchaser of goods exports and the seventh-largest supplier of goods. For the United Kingdom, Spain is the tenth-largest purchaser of goods anywhere in the world and the ninth-largest supplier of goods.
In 2016, Spain exported goods to the United Kingdom worth 19.15 billion euros (up 5.1% on 2015), while imports amounted to 11.18 billion euros (down 11.1%). The trade balance was in Spain’s favour (for the tenth year in a row), with a surplus of 7.97 billion euros. It is the second-largest trade surplus for Spain with any country in the world, second only to France.
In the period January-April 2017, Spanish exports to the United Kingdom stood at 6.56 billion euros (down 0.7% on that period in 2016). Imports from the United Kingdom amounted to 4.01 billion euros (up 8.2%). The trade balance for the four-month period reflects a favourable balance for Spain of 2.55 billion euros.
Spanish exports to the UK are concentrated in the automotive sector (29.1%); the food, beverage and tobacco sector (19.4%); capital goods (17.7%); and chemical products (9.8%). The main imports are motor vehicles (18.7%), machines and mechanical apparatus (10%) and pharmaceutical products (7.4%).
Furthermore, in 2016, Spain exported services to the United Kingdom worth 5.66 billion euros (up 3.4% on 2015). The UK is the top destination for exported Spanish services, mainly due to tourism, and the United Kingdom is the main emitter of tourists to Spain. 18 million British tourists visited Spain in 2016, an increase of 12% on the previous year. Their spending accounts for 20.3% of Spanish revenue from tourists.
The main Spanish non-tourism service exports include: financial and insurance services; those related to tourism; the management of air infrastructure; booking management programs; telecommunications; energy and environmental services; and professional services.
Bilateral investment relations are also highly important. The United Kingdom is the leading destination for Spanish direct overseas investment. The value of investments made by Spanish companies in the United Kingdom to 2015 (stock) is higher than 82 billion euros, which accounts for 18.9% of all Spanish overseas investment.
In turn, the United Kingdom was the second-largest investor in Spain in 2015 (in terms of stock), with 44.62 billion euros, accounting for 12.8% of total overseas investment made in Spain.