Business and Economics
COUNTRYAAH, Spain has in a relatively short time been transformed
from a prominent agricultural country to an industrial and
service country. It has been a member of the EU since 1986,
which has in many ways affected and affected business and
the economy. Contributions from EU structural funds, etc.,
accelerated the necessary restructuring and enabled major
improvements in the country's infrastructure. EU entry was
followed by a sharp increase in imports, which resulted in
large trade deficits. Inflation and interest rates also
showed relatively high figures, and in connection with the
international currency turmoil in the early 1990s, Spain was
forced to devalue the then overvalued currency several
times. The devaluation together with other export promotion
measures, reduced taxes and cuts in the public sector
resulted in strong economic growth until the mid-00s.
In 2007/08, housing prices fell and housing construction
stalled at the same time as the country was hit by the
international financial crisis. As a result, unemployment
increased and private consumption decreased. In order to
counteract the economic downturn that this entailed, the
government implemented a series of stimulus measures in
2009, but despite this, GDP fell by 3 percent and
unemployment continued to rise. In 2010 and 2011, the
government then introduced a series of austerity and tax
increases. In 2012, the government applied for € 100 billion
of EU support loans to save Spanish banks' loan losses.
During the period 2008–11, GDP fell by an average of
about 2 percent annually and the budget deficit increased by
an average of about 10 percent. During the same period,
unemployment increased from 11 to 22 percent. The economic
downturn has also hit the individual regions of Spain hard.
As a result of reduced tax revenues, several regions have
been forced to turn to the state for financial assistance.
At the end of 2013 and the beginning of 2014, the Spanish
economy showed some improvement, mainly as a result of
increased exports. In 2013, the budget deficit was 6.9 per
cent of GDP, which was just above the 6.5 per cent target
that the country negotiated with the EU. In 2014-16, the
upturn continued and GDP increased by 2.6 percent in 2016.
||Change in GDP (%)
||Government debt share of GDP (%)
||Budget deficit or budget surplus
share of GDP (%)
||Unemployment of total workforce (%)
Source: IMF, OECD and World Bank
Spanish agriculture changed during the late 1900s, but
the natural conditions with partly poor soils and dry
climate and the existing ownership structure have slowed
down even more significant change. Northern and northwestern
Spain is characterized by large-scale fragmentation and very
small farms (minifundios), while to the south of the Tajo
River (Andalusia, Extremadura and La Mancha Plains) there
are large estates (latifundios) that are usually used
extensively and with inefficient methods. Only the areas on
the Mediterranean coast and in the Ebro Valley have had a
more developed agriculture, where, among other things,
irrigation has been common.
About 56 percent of the country's area is usable land.
Agriculture, together with fishing and forestry, employed 4
percent of the workforce in 2010. Seeds are grown on half of
the arable land, mainly barley and wheat. Maize is grown in
Galicia and in irrigated areas, while rice is produced
around Seville, Valencia and Tarragona. Sunflowers, which
are grown in bands other than Andalusia and Castilla-La
Mancha, occupy significant areas (8-10 percent). Sugar beets
are an important crop (irrigation) in the Castilla y León
region. Vegetables are grown in a total of about 500,000 ha;
the largest areas are occupied by melons, onions (mainly
garlic) and tomatoes, as well as bean and pea plants.
In Almería in southeastern Spain, whose climate is very
dry and sunny, there is a capital-intensive and industrially
organized cultivation of, among other things, tomatoes that
takes place under plastic roofs and with a large amount of
fertilizers and pesticides. Similarly, an export industry
for strawberries has been built up in Huelva. However, the
methods have caused environmental problems, and the water
withdrawals have led to salt ingress into the groundwater.
Olive trees and grapes occupy 75 percent of the area for
permanent crops. Spain is the world's largest producer of
olive oil and Europe's third largest wine producer after
Italy and France (see Spanish wines)
. Citrus fruits, mainly oranges, are grown in artificial
irrigated areas in Valencia and Murcia, among others.
Apples, peaches, figs, almonds and avocados are other
products from the country's extensive permanent cultures, as
well as bananas from the Canary Islands.
Cattle are found mainly in northern and northwestern
Spain (Galicia - Basque Country), while sheep farming is
more widespread. Local specialties are breeding of horses
About 1/3 of the country's total area is classified as
forest land, but as in other Mediterranean countries, almost
all the original forest has been destroyed long ago. With
the exception of the country's north and northwest, as well
as some mountain regions, productive forests are lacking.
Attempts to reforest are ongoing, and as a basis for the
pulp industry, fast-growing eucalyptus and poplar species
have also been planted. Forest harvesting, which amounts to
approximately 16 million m 3 per year, half of
which will be pulp, cannot meet the country's needs.
Forestry also includes the extraction of natural cork from
cork forests in Andalusia and Extremadura.
Spain has the EU's largest fishing fleet and the
Spaniards consume the second most fish in the world after
the Japanese. Spain is one of Europe's leading fishing
nations, but various restrictions on fishing rights,
including outside Morocco and in European waters, have
affected the industry, making fishing an important and
sometimes controversial issue in EU cooperation. About 1
million tonnes are landed annually; Cod, sardines, tuna,
octopus, mussels and oysters are the most important catches.
The most important catch areas are now along the coasts
of Newfoundland, Greenland and West Africa. Fishing provides
a basis for a significant fishing industry in Spain. Galicia
is the most important region with Vigo and La Coruña as the
largest fishing ports. Various ports along the Bay of Biscay
as well as Cadiz and Huelva in Andalusia and Las Palmas in
the Canary Islands are also significant.
For thousands of years, metal extraction has been
important for developments in the area, not least during the
Roman period, and the assets of minerals and coal have been
of great importance to the development of the Spanish
business community in recent history. Thus, the coal (in
Asturias) and the iron ore (in the Basque country, among
others) became the basis for extensive industrialization in
northern Spain. around Bilbao and Oviedo. The abundant metal
deposits in the Iberian Pyrite belt, a 250 km long
volcanic formation between Seville and Lisbon, have
dominated the supply, mainly with regard to iron, sulfur,
gold, silver, copper, lead and tin. The recovery has mostly
ceased, but exploration for planned exploitation continues.
Spain is one of the world's leading producers of plaster,
flux, sand, gravel and cement. The economically most
important raw materials are copper, zinc, gold, steel, coal,
cement and aluminum. Most deposits are relatively small. An
exception is the mercury mines in Almadén, which were closed
in 2000 due to falling world market prices. The deposit is
one of the richest in the world and has been used since
The mining sector contributes about 1 percent to GDP;
commodity imports are greater than exports.
Nuclear power is Spain's most important domestic energy
source and represents almost half of this energy supply.
Subsequently, biofuels, wind and solar energy, coal, and
hydropower are followed. However, only one fifth of the
total energy demand is produced in the country, and in
total, nuclear energy contributes just over 10 per cent to
the total energy supply. Significantly more important are
oil and natural gas, which contribute about 65 percent and
25 percent, respectively, to energy production. The most
important oil deposits are outside Casablanca, Morocco, but
the extraction from this field represents only a vanishingly
small part of the total oil demand.
Spain is one of the world's leading producers of wind and
solar energy and their share of total energy supply is
increasing rapidly. Renewable energy types contributed just
over 16 percent of energy use in 2014. The goal is to reach
21 percent by 2020. Most of the wind energy effect is
installed in the Castilla y León region in the north-eastern
highlands. The solar power plants are mainly installed in
Andalusia. The hydroelectric power is also well developed by
the construction of a number of dams in the river valleys.
The water is also used for irrigation.
Spain developed during the latter part of the 20th
century into one of the world's major industrial nations.
However, the main features of the historical location
pattern remain. Catalonia has been one of the core
industries of the Spanish industry since the 18th century,
mainly through its large textile industry. The iron and
steel industry, later also other heavy industry, has been
concentrated in northern Spain, mainly in the Basque Country
and Asturias. During the Franco period, the capital area was
mainly invested; Madrid and Barcelona became the country's
two main industrial regions. Following EU accession, the
proportion of industrial investment along the Mediterranean
coast increased. In 2017, the industry accounted for 23
percent of both the country's GDP and employment.
In addition to the Basque Country (Bilbao area) and
Asturias (Avilés-Gijón-Oviedo), a large iron and steel
industry has been built up in Valencia (Sagunto). Although
the country lacks its own bauxite, aluminum smelters have
been built in several places, including Avilés, San Ciprián
and Valladolid. The metallurgical industry is also located
in Cartagena. Spain has several major oil refineries, e.g.
in Tarragona, Bilbao, Santa Cruz de Tenerife, Cartagena,
Algeciras and Puertollano. The chemical industry is found
mainly in the Barcelona and Madrid areas as well as in
Bilbao, Santander and Gijón. Cement is manufactured in,
among others, Bilbao and Seville, and Spain is one of the
world's largest exporters.
Large parts of the heavy industry, especially the iron,
steel and shipbuilding industries, have been forced to cut
and restructure as a result of the economic downturn and
increased international competition. The machinery and
engineering industry has had a more favorable development.
The automotive industry has become a leading industry branch
with significant exports. Two of the country's largest
industrial companies are SEAT (major owner Volkswagen) and
Spanish Renault, but many of the world's other major car
companies have established themselves in Spain. Composition
factories can be found in Madrid, Barcelona, Valencia,
Seville, Zaragoza, Valladolid and Cadiz. In total, about 2
million cars are produced per year.
The country's main industrial regions are found around
Barcelona, which has a diverse and growing industry but
where competition from, for example, Asian countries has led
to difficulties for the area's traditional textile industry
(as well as for the leather and shoe industry in Alicante
and Mallorca), as well as around Madrid, as in large Seen
without heavy industry but has an extensive consumer goods
industry and other light industry. In addition to the Bay of
Biscay, there are also more concentrated industrial regions
in Galicia (Vigo – Pontevedra, La Coruña – El Ferrol) with
ties to other large fish industries and in metropolitan
areas such as Valencia, Alicante, Cartagena, Malaga,
Seville, Cádiz and Zaragoza.
Since 2007, the country's economic problems have also
affected the industrial sector, which has experienced an
increased number of bankruptcies. Foremost is the
construction-related industry that has been affected. During
the 10th century, Spain has tried to develop industrial
industries with a focus on new technology and renewable
The country's trade balance was long negative. Earlier,
the large tourist income and transfers from Spanish emigrant
workers made the trade balance positive. However, after
entry into the EU, imports increased much more than exports.
The differences could then no longer be offset by tourist
income, but Spain had a significant deficit in its foreign
trade until the beginning of the 2010s. In 2013, however,
the trade balance showed a small surplus.
The most important export goods are machinery, cars and
agricultural products. Imports include machinery and
electrical equipment as well as crude oil, food and
transport equipment. The majority of trade exchanges take
place with other EU countries, mainly France, Germany,
Italy, the UK and Portugal, as well as with the USA.
With just over 60 million tourists entering 2013, Spain
is the world's second largest tourist country after France.
During almost the entire first half of the 20th century, the
number of visitors was 250,000 per year and only one million
visitors were reached in 1950. With the stabilization of the
Spanish currency in 1959 and the development of charter
tourism shortly thereafter, the number of visitors in 1965
amounted to 14 million, in 1973 to 28 million and in 2000 to
48 million. The most important tourist areas are Catalonia,
the Balearic Islands, the Canary Islands and Andalusia. Most
visitors come from the UK, Germany and France. Swedes
accounted for 1.9 million of the visits.
A significant number of tourists come to enjoy Spain's
sun and bathing opportunities. The major destinations are
the Canary Islands, Mallorca and the Spanish Mediterranean
coast from Costa Brava in the north to Costa del Sol in the
The nature and hiker is interested in traveling to the
Pyrenees and the Cantabrian mountains in the north with the
large national parks Ordesa and Picos de Europa, which among
other things have an interesting wildlife. Many follow the
old pilgrimage west across the Cantabrian mountains to
Santiago de Compostela in Galicia. In southern Spain, the
Sierra Nevada mountain range offers both spring and summer
trips as well as skiing holidays in the winter.
At the outlet of the Guadalquivir River in Andalucia, it
is located on the UNESCO World Heritage List, the Doñana
National Park with rich bird life. Fascinating nature can
also be found in the Canary Islands with Caldera de
Taburiente on La Palma and Teide on Tenerife. Spain's
diverse past, with impetus from a variety of cultures, has
set aside numerous historical monuments, many of which are
listed on the World Heritage list. This is especially true
of the central parts of several old cities, with cathedrals
and other important historical buildings. In addition to the
aforementioned Santiago de Compostela in Galicia, Toledo,
Salamanca, Segovia, Ávila, Burgos and a number of other
cities on the high plateau are noted. In Andalusia, where
the Muslim influence has been strongest, Granada with the
Alhambra Palace and the Generalife, Garda, Córdoba with La
Mezquita Cathedral, Seville,
With its diverse selection of museums and events,
however, Madrid, with the Prado Museum and the Centro de
Arte Reina Sofía, and Barcelona, with among others the
Picasso Museum and the Maritime Museum, attracts the most
visitors among the cities. Even smaller resorts with special
sights attract many tourists, such as the Guadalupe
monastery in Extremadura and the region's historically
interesting little capital Mérida, the Basque holy city of
Guernica, or the ravine town of Ronda in Andalucia with the
bullfighting arena declared as a national monument.