Spain regains the confidence of investors

The 2019 Foreign Direct Investment Confidence Index (FDI) by A.T. Kearney places Spain in 11th place out of the 25 economies analyzed. This position represents an increase of four places for Spain, the second greatest leap after Denmark, which rose six places from 20th to 14th. The ranking is headed by the United States, which remains in first place, and by Germany, which regains the second place it surrendered to Canada in 2018.

For its part, Canada, which jumped from fifth to second place in a single year, slipped slightly and is now third, followed by the United Kingdom, which remains firmly in fourth place, and France, which overtook Japan (sixth) and switched places with China which is now seventh. In the next positions ahead of Spain are Italy, Australia and Singapore. Spain is in turn ahead of the Netherlands, Switzerland, Sweden and India. Spain is fifth out of the 14 European countries featured in this classification.

Investors' assessment
The ranking is based on a maximum score of three points, in which the best classified, the United States, obtained 2.10, and Mexico with 1.49 is last. This year Spain scored 1.62, compared to 1.48 in 2018. It has therefore regained its 11th place which it had lost one year ago.

The report is prepared based on the assessment of the investors consulted by A.T. Kearney. The consulting firm underlines the contradiction between the confidence index, the growing political and economic risks in the economies in which they say they have confidence, and their optimism about the global economy, and says: “Despite investors consistently telling us in recent years that they plan to increase their levels of FDI, the recorded level fell once again in 2018. In addition, localism and cities are rising in importance in an era of growing nationalism”.

Positive economic outlook
According to UNCTAD's preliminary estimates, FDI flows tripled in Spain in 2018, largely reflecting a renewed optimism among the business community. According to the report, these results indicate that investors are unfazed by the political uncertainty in Spain.

The positive economic outlook may be a key factor in this optimism. After several difficult years, the economic indicators are improving in all areas. Growth is forecast to reach 2.1% in 2019 and then decline slightly to nearly 1.6% in the medium term. The unemployment rate remains high in comparison with other major economies but has fallen by half since 2012.

Labour productivity and costs have also remained highly competitive in comparison with other major markets. Similarly, the Spanish financial system shows increasing signs of recovery, with considerably improved lending rates. A better economic climate is also likely to drive the increase in international private equity flows toward Spain.

Investor confidence is particularly visible in the offers of renewable energy, as Spain was the top European destination for this type of investments last year.

Last updated: 03|07|2019

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