2011 Reports

Inward FDI in Spain and its policy context

Clifton, Judith; Díaz-Fuentes, Daniel; Ruiz, Eduardo

Inward foreign direct investment (IFDI) into Spain boomed during most of the 2000s, with IFDI stock quadrupling from US$ 156 billion at the end of 2000 to a record high US$ 604 billion by the end of 2010. The bulk of this investment originates in Europe: it represented over three quarters of the total in 2003, reaching 85% by 2009. In recent years, Spain has started to receive increasing investment flows from Latin America and the Gulf Arab countries, in addition to investment from other emerging markets, particularly China. Leading industries attracting inward FDI have traditionally included automobile and retail businesses, while the sale of former monopolies, such as the utilities, and Spain's emerging move toward world leadership in renewable energies are providing fresh impetus for investment. Despite a slow-down in 2009 as a consequence of the global financial and economic crises, Spain has been successful in retaining its FDI stock over the decade 2000-2010, which augurs well for its future performance. Although FDI inflows fell noticeably in 2009, FDI inflows in 2010 confirm that a substantial recovery has been achieved.