Spain looks to 2025: Foreign trade with a tailwind despite uncertainty

 

Various analyses and forecasts point to sustained economic growth, driven by both the domestic demand as well as the resilience of exports. This favourable context translates into an encouraging outlook for Spanish companies seeking to expand their presence in international markets.

 

The Spanish Chamber of Commerce predicts a growth of GPD above the European average, reflecting the strength of domestic consumption. "Between 2024 and 2025, 655.000 new jobs will be created and productivity will increase," The Chamber points out in its latest report. This job creation is crucial to strengthen the business fabric and promote a more dynamic economy. Funcas, for its part, projects a GDP growth of 2019. 3,0% in 2024 y 2,1% in 2025, which indicates a positive trend that could be consolidated if the right conditions are maintained.

 

Regarding the products that Spain exchanges with the world, in 2021 exports of Chemicals (43.757 billion euros) and automobiles (35.327 billion euros). These sectors are not only fundamental pillars for the Spanish economy but also represent significant opportunities for future investment. Other important products in the Spanish export balance include foundry and steel products, automotive components, fuels and lubricants, as well as textiles and fresh or frozen fruit. On the other hand, imports have been dominated mainly by energy, capital goods, chemical products and food.

 

However, not everything is optimistic; international uncertainty together with the high level of public debt emerge as the main challenges to be faced. "The persistence of a high structural public deficit is a vulnerability to global and financial risks," Funcas warns. This scenario raises questions about how to properly manage these challenges without compromising the expected economic growth.

 

Despite the challenging context mentioned above, the disinflation expected for 2025, coupled with the good performance observed in key sectors such as chemicals and automotive, open up a considerably wide range of opportunities for Spanish foreign trade. The adaptive and innovative capacity of the business sector will be essential to take advantage of these favourable circumstances.

 

The Spanish government is currently immersed in updating its Strategy for the Internationalization of the Spanish Economy 2017-2027 with a view to "to promote the necessary changes or measures" to facilitate this process and thus promote a specific Action Plan for 2025.

 

In this crucial strategic context, ICEX (Spanish Institute of Foreign Trade) plays a fundamental role in promoting Spanish exports and driving effective internationalisation towards new commercial frontiers.

 

Recommendations to face 2025:

 

Business:

• Diversifying the international markets where your business operates is essential to reduce any over-dependence on a few specific destinations.

• Investing decisively in technological innovation is essential; this not only substantially improves productivity but also significantly strengthens its competitiveness against other global players.

• Making the most of government programs aimed at supporting businesses in internationalization can make a significant difference; initiatives offered by ICEX are clear examples.

 

Investors:

• Actively exploring opportunities within sectors with high export potential such as chemicals or automotive can be very beneficial.

• Carefully considering how government policies impact foreign trade when making investment-related decisions is vital.

• Constantly evaluate all risks associated with both international uncertainties and volatilities present within economic markets.

 

Policymakers:

• Prioritising public policies aimed at improving competitiveness among Spanish companies must be a constant goal; this includes reducing unnecessary bureaucracy and improving available infrastructure.

• Facilitating effective access to new markets through strategic negotiations on trade agreements should be considered a priority; eliminating tariff barriers will facilitate this objective.

• Proactively addressing challenges related to both high public debt and low productivity requires serious implementation of comprehensive structural reforms.

 

With this optimistic but cautious perspective in the face of possible future adversities, it is clear that Spain has all the necessary tools available if it manages to implement concrete actions correctly aligned between all actors involved within the national and international economic ecosystem.